Report 2015-507 All Recommendation Responses

Report 2015-507: Follow-Up—California Department of Public Health: Laboratory Field Services Is Unable to Oversee Clinical Laboratories Effectively, but a Feasible Alternative Exists (Release Date: September 2015)

Recommendation #1 To: Public Health, Department of

While the Legislature considers eliminating the requirement that labs obtain state-issued licenses or registrations and receive oversight from Laboratory Services, Laboratory Services should begin taking action to address its deficiencies by developing a corrective action plan by December 31, 2015. The corrective action plan should address its plans for implementing the recommendations from our 2008 audit and from this follow-up audit. For each item in its corrective action plan, Laboratory Services should identify the individuals responsible for ensuring it takes the corrective action, the resources it needs to carry out the corrective action, and the time frame in which it expects to successfully complete the corrective action.

Agency Response*

CDPH developed and submitted Corrective Action Plan by the due date of December 31, 2015

  • Response Type†: 6-Month
  • Completion Date: December 2015
  • Response Date: March 2016

California State Auditor's Assessment of Status: Fully Implemented


Agency Response*

Laboratory Field Services is currently in the process of developing the corrective action plan and will complete the plan by the due date of December 31st, 2015.

  • Response Type†: 60-Day
  • Estimated Completion Date: December 31, 2015
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending


Recommendation #2 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should inspect all in-state and out-of-state labs it has licensed every two years.

Agency Response*

LFS has completed 100% of surveys for in-state clinical laboratories requiring routine, biennial surveys. As of June, 2017, 2,476 in-state clinical laboratories required routine, biennial surveys. Of this number, 1,120 were the responsibility of an Accrediting Organization (AO), 48 were the responsibility of LFS' On-site Licensing Section, and 1,308 were the responsibility of LFS' CLIA section. As of June, 2017, all required in-state clinical laboratory surveys have been completed.

LFS has completed 94% of surveys for United States (US)-based out-of-state clinical laboratories requiring routine, biennial surveys. As of August, 2017, 472 US-based out-of-state clinical laboratories required routine, biennial surveys. Of this number, 335 were the responsibility of an AO, and 137 were the responsibility of LFS' On-site Licensing Section. The AOs have completed their surveys. LFS has only 20 US-based out-of-state laboratories remaining to survey.

LFS has nine clinical laboratories located outside the US, termed "out-of-country labs". Of these nine, six are accredited. LFS has responsibility for the three facilities not accredited. None of these "out-of-country" laboratories have been surveyed to date.

Overall, through August, 2017, LFS has completed 99% of the required, biennial surveys.

  • Response Type†: Annual Follow Up
  • Completion Date: August 2017
  • Response Date: September 2017

California State Auditor's Assessment of Status: Fully Implemented

LFS has demonstrated that it has implemented necessary processes, including a robust monitoring mechanism, to inspect all in-state and out-of-state labs as it is required.


Agency Response*

To assist with performing inspections, Laboratory Field Services (LFS) approved two additional Accreditation Organizations (AO) applications during State Fiscal Year (SFY) 2015/2016. As of September 2016, of the 2,688 licensed facilities that require biennial inspections, 1,234 are now AO certified, reducing the number of in-state and out-of-state inspections LFS will be required to perform in SFY 2016/2017. LFS also continues to work closely with the Department's Human Resources Branch to fill vacant positions, including examiners.

In SFY 2015/2016, 1,274 of California clinical laboratories required routine in-state inspections; of these, 1, 020 (80%) were performed. COLA, a Public Health approved Accrediting Organization (AO) for clinical laboratories, completed 187 inspections. LFS Clinical Laboratory Improvement Amendments (CLIA) Section completed 652 surveys that were both state licensing and CLIA inspections. LFS On-Site Licensing Section performed 181 inspections. Additionally, 30 out-of-state labs were inspected, LFS inspected 26 and COLA inspected 4.

  • Response Type†: 1-Year
  • Estimated Completion Date: June 2017
  • Response Date: September 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

The Laboratory Field Services Branch (LFS) continues to analyze business processes, policies, and procedures to determine efficiencies and reduce redundancies. This continues to result in change recommendations that are vetted internally and implemented when appropriate. Some preliminary changes are revised licensing application forms, form availability on website, and FAQs for license applications. These changes helped to streamline processes and alleviate time spent on administrative tasks. As indicated in the Corrective Action Plan, a draft facility survey schedule was implemented for all licensed labs in and out of state. LFS held an in-service meeting in December 2015 to re-train staff on renewal/routine survey processes to improve LFS' efficiency, productivity, and provide consistent results. In January 2016, new criteria to perform new license application surveys were implemented. LFS established baseline performance metrics in January 2016. These metrics are used to help develop a dashboard that will support LFS in tracking and managing inspection workload. At the December 2015 CLTAC meeting, a charge was made to form subcommittees to assist the Department. These committees are meeting on the following subjects: CSA Audit, Regulations, and Recruitment and Retention. 1. CLTAC CSA Audit subcommittee: Meetings occurred on February 10, 2016 and February 25, 2016. The members discussed which recommendations they will focus on going forward. 2. CLTAC Regulations subcommittee: The Subcommittee Chair discussed the format for questions to be listed and brought before the subcommittee for recommendations. The initial issues have been prepared. An introductory meeting will be scheduled the members will decide on prioritization and how to bring additional issues to the Department's attention. CLTAC Recruitment and Retention subcommittee: The Chair and members will finalize the date of the initial meeting before the next CLTAC meeting set in March 2016.

  • Response Type†: 6-Month
  • Estimated Completion Date: 06/30/2017
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

In response to the audit, California Department of Public Health (CDPH) convened work groups to focus on Laboratory Field Services (LFS). These LFS work groups are comprised of LFS staff and managers with technical skills in various operational areas. These work groups continue to analyze its business processes, policies, and procedures to determine efficiencies and reduce redundancies. This has resulted in some change recommendations which are currently being vetted internally; in addition, other changes are discussed with LFS' Clinical Laboratory Technical Advisory Committee (CLTAC). CLTAC is a legislative mandated, multi-disciplinary advisory committee, with members of interest groups related to clinical laboratories. It is composed of 21 voting members and one non-voting member. Members come from a wide background including: blood centers, respiratory care, the California Association of Medical Laboratory Technology, the California Medical Association, Engineers & Scientists of California Local 20, the American Association for Clinical Chemistry, the California Association of Public Health Laboratory Directors, the California Clinical Laboratory Association, the Philippine Association of Medical Technologists, the California Association of Cytotechnologists, the California Association of Bio analysts, and others.

Accrediting Organizations (AO) will assist LFS with the laboratory inspection function and those efforts are described in Response #6.

Due to attrition and turnover, staffing resources have impacted the ability to conduct inspections. Activities related to recruitment and retention are discussed in #7.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2017
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health) has convened work groups to focus on Laboratory Field Services; however, Public Health's response to this recommendation has yet to articulate any specific action steps that will be taken.


Recommendation #3 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should develop and implement proficiency testing policy and procedures for ensuring that it can promptly identify out-of-state labs that fail proficiency testing.

Agency Response*

Laboratory Field Services (LFS) revised its proficiency testing policies and procedures to ensure that out-of-state laboratories (OOS) proficiency testing results are reviewed twice a year to ensure that laboratories are enrolled in appropriate proficiency testing. The monitoring begins when OOS laboratories submit their annual license renewal, and a follow up review is conducted six months later. In addition, OOS laboratory proficiency testing is reviewed during on-site visits by both LFS and accrediting organizations.

LFS staff was trained on these new proficiency policy and procedures on August 18, 2016.

  • Response Type†: 1-Year
  • Completion Date: August 2016
  • Response Date: September 2016

California State Auditor's Assessment of Status: Fully Implemented

Laboratory Services developed proficiency testing policies for out-of-state labs, which helps ensure it reviews those labs' test results as required. In addition, Laboratory Services has trained its staff on the updated policies.


Agency Response*

The Laboratory Field Services Branch continues to convene work groups to analyze business processes, policies, and procedures to determine efficiencies and reduce redundancies related to out-of-state applications and proficiency testing. This continues to result in changing recommendations that are vetted internally and implemented when appropriate, and will be used to update the policies and procedures as necessary by April 30, 2016 as indicated in the Corrective Action Plan. One of the changes evaluated is how to implement proficiency testing reviews more than one time per year. A Staff Services Analyst (SSA) was hired. The SSA assists the examiners in analyzing the proficiency testing data and make recommendations to the examiner for action, and tracks follow up responses.

  • Response Type†: 6-Month
  • Estimated Completion Date: 06/30/2016
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

LFS work groups continue to review and revise its business processes related to out-of-state proficiency testing (PT). This includes re-assigning clerical support for this activity, and recruiting for a dedicated analyst position to provide analytical support. By assigning administrative tasks to non-Examiners, Examiners will be utilized more efficiently and be able to focus on technical (pass/fail) aspects of PT performance. The analyst will complete statistical reports that will enable LFS to identify labs with unsatisfactory and unsuccessful PT performance for the Examiner's follow-up on laboratory corrective action.

LFS is developing a protocol to select and review out-of-state PT events more frequently than at the annual renewal.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2016
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health has convened work groups to focus on Laboratory Field Services and states it is developing a protocol to review the results from proficiency testing for out-of-state labs.


Recommendation #4 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should improve its complaints policy and procedures to ensure that it either investigates allegations promptly or clearly documents its management's rationale for not investigating. It should also establish clear expectations for when staff must visit a lab to verify successful corrective action.

Agency Response*

Laboratory Field Services (LFS) revised its complaint policies and procedures; increased staffing dedicated to focusing on complaints by three full-time staff, and enhanced its complaint database. Changes made to the complaint database include documenting the rationale for not investigating a complaint, and when to perform follow-up investigations to verify corrective action has been completed. In addition, the database now has a reporting function that provides "due dates" of complaint investigations, which staff review to ensure that the appropriate timeframes are being met.

LFS staff was trained on the new complaint policy and procedures on August 18, 2016.

  • Response Type†: 1-Year
  • Completion Date: August 2016
  • Response Date: September 2016

California State Auditor's Assessment of Status: Fully Implemented

Laboratory Services developed policies that reflect the recommended changes including time frames for investigating complaints, documenting decisions regarding complaints, and expectations for staff to verify corrective action.


Agency Response*

The Laboratory Field Services Branch continues to convene work groups to analyze business processes, policies, and procedures to determine efficiencies and reduce redundancies related to complaints. This continues to result in change recommendations that are vetted internally and implemented when appropriate, and will be used to update the policies and procedures as necessary by April 30, 2016 as indicated in the Corrective Action Plan. Some examples of changes being reviewed include, implementing a process to assure that complaints are being investigated timely, and developing a process to investigate complaints in registered clinical laboratories. An Examiner I was fully trained and is performing complaint investigations. A Staff Services Analyst (SSA) was hired. The SSA provides administrative and analytical support to the examiners, allowing them more time to focus on complaints investigations.

  • Response Type†: 6-Month
  • Estimated Completion Date: 06/30/2016
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

LFS workgroups continue to review and revise its business processes related to the complaints policies and procedures, including timeliness, developing processes for tracking and investigating complaints in registered labs, criteria for when a complaints investigation or re-visit is warranted. In addition, LFS is developing processes for complaints in deemed facilities.

LFS is hiring a Staff Services Analyst (SSA) to provide administrative support to the investigations operations. The administrative tasks performed by the SSA will allow Examiners to focus on the actual complaint investigation. In addition, an Examiner I was hired in August 2015 and is currently in training. By January 2016, the Examiner I will be fully trained and begin to conduct complaint investigations. By adding this Examiner I to staff currently conducting investigations, LFS staff will not need to balance the needs of scheduled surveys against the need to investigate complaints.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2016
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending


Recommendation #5 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should dedicate multiple staff to sanctioning efforts and update its sanctioning policy and procedures, including identifying steps to ensure that labs adhere to sanctions and that it collect civil money penalties. In addition, it should develop a single sanctions tracking system that multiple managers can monitor and that will allow it to periodically reconcile the monetary penalties it receives with Public Health's accounting records.

Agency Response*

Laboratory Field Services (LFS) revised its sanctioning and enforcement policies and procedures and developed a database system to track sanctions. These efforts will help LFS track deficiencies and identify opportunities to impose sanctions, document sanctions imposed and civil money penalty amounts, and document our penalty collection procedure and follow-up policy.

The new tracking system is available and accessible by authorized LFS managers to monitor and track sanctions in process. The On-Site Licensing Section Chief responsible for sanctioning efforts was hired in December 2015.

LFS staff was trained on these revised sanctioning and enforcement policy and procedures on August 18, 2016.

  • Response Type†: 1-Year
  • Completion Date: August 2016
  • Response Date: September 2016

California State Auditor's Assessment of Status: Fully Implemented

Laboratory Services has developed policies to better define its sanctioning and enforcement practices. In addition, it has designated multiple staff roles in these processes and trained the staff to perform these roles.


Agency Response*

The Laboratory Field Services Branch (LFS) continues to convene work groups to analyze business processes, policies and procedures related to the enforcement and civil money penalties policies, including identifying steps to ensure that labs adhere to sanctions and that LFS collects civil money penalties. This continues to result in change recommendations that are vetted internally and implemented when appropriate. LFS will update the policies and procedures as necessary by April 30, 2016 as indicated in the Corrective Action Plan. In addition to the Examiner III, Section Chief hired in December 2015 to coordinate sanctioning efforts and develop the accrediting organization program LFS has met to discuss a systematic, team approach to enforcement, sanctions, and civil money penalties. Draft policies and procedures are being developed. A Staff Services Analyst (SSA) was hired. This SSA provides administrative and analytical support to the examiners, allowing them more time to focus on the technical aspects of laboratory enforcement and sanctioning efforts.

  • Response Type†: 6-Month
  • Estimated Completion Date: 06/30/2016
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

LFS is hiring an Examiner III, who will act as a designated lead for enforcement/civil money penalties and sanctions process. The lead is responsible for coordinating with staff to ensure compliance with sanction efforts, collection of monetary penalties and developing a centralized tracking system to monitor sanctions. In addition, the lead will implement improvements recommended by the LFS consultant who is assigned to research the department's accounting process. LFS work groups continue to review its policies and business processes; and a tracking function will be integrated in the new information systems database for facility and personnel licenses which will assist with crosschecking sanctions and complaints.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2016
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.


Recommendation #6 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should work with Public Health's budget section and other appropriate parties in developing a process to assess the budget act annually and to adjust its fees accordingly. The process should include its management's review and approval of fee adjustments before it posts those fees publicly.

Agency Response*

Public Health developed an annual process to determine whether Laboratory Field Services' application and renewal fees are sufficient to sustain its operations and meet required responsibilities. In May 2017, this process was approved and management and staff whose duties are impacted by this process were trained. Current fees are adequate to cover state fiscal year 2017-18 expenses for both the Clinical Laboratory Improvement Fund and the Tissue Bank Fund.

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

California State Auditor's Assessment of Status: Fully Implemented

Public Health provided us with its revised policy related to fee adjustments, as well as evidence that Laboratory Field Services staff have been trained on this new policy. We reviewed the policy and agree that it implements our recommendation.


Agency Response*

Laboratory Field Services (LFS) worked with the Department's Office of Legal Services, the budget section, and with Department management to review its authority to adjust fees on an annual basis. As a result of this review, LFS has recently completed an initial draft of policies and procedures for fees and other administrative aspects of the LFS program. The draft policies and procedures are currently being circulated for review and are anticipated to be finalized by December 2016. Once complete, training will be initiated for staff on the new policies and procedures.

  • Response Type†: 1-Year
  • Estimated Completion Date: December 2016
  • Response Date: September 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

The consultant provided recommendations to address concerns identified by CSA as well as those found during the consultant's own assessment. Laboratory Field Services (LFS) is working internally to identify best alternatives to execute these recommendations. LFS is also working closely with the Department's Office of Legal Services to assess statutory authority related to the program's ability to set fees. This legal assessment, anticipated to be completed in March 2016, will be used to help develop the department's process for setting program fees moving forward.

  • Response Type†: 6-Month
  • Estimated Completion Date: 12/31/2016
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

CDPH has executed an agreement with a consultant to achieve three deliverables:

1) Assess LFS' budget, fee, revenue, and fiscal structures and identify improvements needed;

2) Provide LFS with a list of recommendations to resolve concerns identified by CSA as well as those found during the consultant's own assessment; and

3) Work with LFS to develop an implementation plan by December 1, 2015, with a corrective action plan in place by December 31, 2015.

The deliverables will be used by CDPH to develop a process to assess the budget act annually and adjust fees accordingly. Several meetings between LFS, the consultant, and the Budget Section's budget analyst have already been held. The CDPH's Office of Legal Services is reviewing related legal issues. A tracking tool was presented to monitor completion of agreement milestones including fiscal document review, budget issues, fee issues and fiscal structure.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2016
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action, including hiring a consultant. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.


Recommendation #7 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should maximize the opportunity to partner with accreditation organizations by developing an accreditation organization program and issuing an All Clinical Laboratories Letter detailing the program's components. In addition, it should consult with legal counsel and draft an agreement outlining the role and the responsibilities that Laboratory Services and the accreditation organizations will assume.

Agency Response*

Laboratory Field Services (LFS) reviewed and approved two additional Accreditation Organizations (AO) applications during SFY 2015/2016. LFS now has three AOs working in partnership to perform inspections and investigate complaints. All Clinical Laboratory Letters (ACLL) have been developed in partnership with the Department's Office of Legal Services and issued detailing the program components. The required routine clinical laboratory facility inspections will be performed by AOs or in coordination with LFS federal Clinical Laboratory Improvement Amendments surveys.

-Initial Notice of Approval of LFS Accrediting Organizations: http://www.cdph.ca.gov/programs/lfs/Documents/Initial%20Notice%20-%20LFS%20Approval%20of%20Accrediting%20Organizations.pdf

-ACLL 16-01: http://www.cdph.ca.gov/programs/lfs/Documents/ACLL%2016-01%20Final%20Action.pdf

-ACLL 16-02: http://www.cdph.ca.gov/programs/lfs/Documents/AOs%20-%20ACLL%2016-02.pdf

LFS staff was trained on the ACLL letters on August 18, 2016.

  • Response Type†: 1-Year
  • Completion Date: August 2016
  • Response Date: September 2016

California State Auditor's Assessment of Status: Fully Implemented

Laboratory Services has expanded the number of accreditation organizations authorized to perform laboratory inspections and investigate complaints. In addition, through All Clinical Laboratory Letters posted on its website, Laboratory Services has outlined the role and responsibilities associated with that authorization.


Agency Response*

The Laboratory Field Services Branch (LFS) continues to convene work groups to analyze business processes, policies, and procedures related to the Accrediting Organization (AO) program to ensure efficiency, productivity, and timeliness. LFS released the All Clinical Laboratories Letter (ACLL) introducing the program's components on February 24, 2016. The first notice introduces the AO program. However, upon legal review it was determined that since an ACLL has the force of regulation, and the initial introductory notice does not contain any new regulatory material, it was posted as an "important notice" on the LFS website.

An ACLL (16-01) notifying laboratories of the AO program details, has been posted on the LFS website.

An ACLL is forthcoming regarding oversight requirements for the AOs. It is anticipated that this ACLL will be completed and posted on the LFS website by March 2016 with an April 2016 effective date.

LFS currently has one AO approved to complete inspections, and is finalizing the approval for a second AO. LFS is still reviewing the application for the third AO.

As mentioned in response # 4, LFS hired an Examiner III, Section Chief who is responsible for developing and overseeing the LFS's AO program. A Staff Services Analyst (SSA) was hired. This SSA provides administrative and analytical support to the AO program.

  • Response Type†: 6-Month
  • Estimated Completion Date: 09/30/2016
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

LFS has met with OLS to discuss issues related to the Accrediting Organizations (AO). LFS is drafting oversight requirements, which will include inspections, for the AO, and LFS is also drafting an All Clinical Laboratory Letter detailing the program's components. LFS continues to review its business processes to make the necessary changes for inclusion of deemed facilities.

LFS had three AO applications, one has been approved and is performing inspections, one has completed the review and one is currently under review. The one that has completed review had four items identified as needing clarification from the AO. As a result, a response will be sent to the AO to clarify the four items. The one currently under review will be completed by the end of January 2016.

  • Response Type†: 60-Day
  • Estimated Completion Date: September 30, 2016
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.


Recommendation #8 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should address staffing issues by preparing and resubmitting to Public Health a recruitment and retention proposal, developing a succession plan, and taking necessary steps to implement its planned reorganization.

Agency Response*

LFS continues to use an enhanced recruitment and retention plan, and continues to revise policies and procedures, as well as workflow processes to optimize use of clerical and analytical support for administrative functions. LFS, working with the Department's Human Resources Branch (HRB) and Office of Quality Performance and Accreditation, has completed a succession plan. HRB continues to hold the Examiner classification exam on a continuous (quarterly) basis, and it is available online. In addition, LFS contracted with a facilitator to do strategic planning and succession planning. After a series of off-site meetings with the management staff, LFS is finalizing the operational aspects of the re-organization and strategic planning.

In SFY 2016/17, LFS initiated twelve new requests for personnel actions for examiners, and completed ten. Nine separations occurred. A total of 32 applications were received, 18 interviews were conducted, and 4 new examiners were added. LFS attended five recruitment events in SFY 16/17, and implemented one recruitment activity that included mailing out thousands of postcards to all active clinical laboratory scientists and public health microbiologists to advertise Examiner classification exams and vacancies.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: June 2018
  • Response Date: September 2017

California State Auditor's Assessment of Status: Partially Implemented


Agency Response*

Laboratory Field Services (LFS) continues to make progress addressing staffing and recruitment issues for the program.

LFS implemented the recruitment event calendar and made progress on the recruitment plan reported in the March 2016 update to this audit. LFS also revised numerous policies and procedures and workflow processes to optimize use of clerical and analytical support for administrative functions. This frees examiners to focus on the clinical technical aspects of their job.

In September 2016, LFS filled the Branch Chief position, two Examiners positions (an Examiner I and an Examiner III), a Supervising Program Technician II position, and a Program Technician II position.

LFS has approved two additional Accreditation Organizations (AO) applications during SFY 2015/2016. This enables the AOs to perform more inspections and complaint investigations for effective oversight of labs. The required routine clinical laboratory facility inspections will be performed by AOs or in coordination with Laboratory Services federal Clinical Laboratory Improvement Amendments surveys.

Rather than acquiring a consultant to develop a succession plan, LFS will work with the Department's Human Resources Branch, Office of Quality Performance and Accreditation, and CalHR to develop a succession plan specific to LFS's recruitment and retention needs. It's anticipated that this could be completed by July 2017.

  • Response Type†: 1-Year
  • Estimated Completion Date: July 2017
  • Response Date: September 2016

California State Auditor's Assessment of Status: Partially Implemented

Laboratory Services has taken some steps to address staffing and recruitment issues as recommended. It continues to work on its succession plan.


Agency Response*

Laboratory Field Services Branch (LFS) is actively recruiting for its vacancies and all positions have hiring packages. LFS hired an Examiner III and an SSA. LFS is waiting on final HRB approval for two additional Examiner I positions and one AGPA. The Branch Chief position is in an "open exam" phase concluded March 1, 2016, and HRB is reviewing the exam applications. LFS developed a final recruitment event calendar and developed a draft recruitment and retention plan.

LFS continues to work with upper management and the Department's Contract Management Unit on the Scope of Work for acquiring consultant services to assist LFS in addressing this recommendation.

  • Response Type†: 6-Month
  • Estimated Completion Date: 06/30/2017
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

CDPH is in process of hiring a candidate for the position of Examiner III (Section Chief) for on-site facility inspections of licensed laboratories. This position is responsible for AO application reviews, civil money penalties, and ensuring timely performance of on-site inspections. In addition, CDPH is in process of hiring an Examiner II, and has already filled several clerical positions, as well as the personnel liaison position. CDPH will continue to look for candidates for a vacant Examiner I position.

To address recruitment and retention challenges, CDPH has taken the following actions:

- In October 2015, LFS participated in a statewide annual conference of the California Association of Public Health Laboratory Directors, with the goal of increasing LFS' visibility as a desirable career.

- LFS has implemented new policies related to training. Information technology classes such as MS Word, Outlook, and Excel have been held on the Richmond campus for the first time in over six years. In addition, LFS staff is encouraged to attend career related and growth trainings provided by CalHR, and to pursue career growth opportunities. Currently, two existing Examiners and one analyst are pursuing graduate degrees.

- LFS management, in coordination with the new personnel liaison, is working on developing a formal recruitment and retention proposal, succession plan and reorganization.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2017
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.


Recommendation #9 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should ensure that its information technology data systems have necessary safeguards, contain accurate and complete data, and support its program needs.

Agency Response*

LFS, in partnership with ITSD, began formal development of an electronic licensing system in June, 2017, and continues development using an agile project management model. Agile project management is an iterative approach to planning and guiding project processes. CDPH is utilizing the Department's existing licensing platform, Pega system, to build this application.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: July 2018
  • Response Date: September 2017

California State Auditor's Assessment of Status: Pending


Agency Response*

Laboratory Field Services (LFS) is working with the Information Technology Services Division (ITSD) to develop an electronic licensing system for clinical laboratory facilities that would provide better record keeping and tracking of facility licensure, registration, ownership, complaint tracking, enforcement tracking and management reports; accelerate the applications processing time, which will help ensure that all labs testing California specimens are inspected in a timely manner and are in compliance with federal and state laws; centralize the application process for both new and renewal license and registration applications; streamline workload for LFS staff; and establish better accountability for management within Public Health.

The application will be developed on the department's existing PEGA System. The PEGA System licensing platform will replace the existing legacy mainframe and will be a foundation on which all new and existing licensing applications are built. The new online personnel licensing application (PERL) was built on the PEGA platform, and it is anticipated that LFS will be able to leverage lessons learned from that application build for the facilities licensing application design.

The department is developing a scope of work to bring a contractor on-board to begin configuring the licensing system for LFS. The LFS electronic licensing system now has an approved Stage 1 Business Analysis (S1BA). Department of Technology, Technology Letter 16-08, as of September 12, 2016 delegated approval of S1BA documents to Agency Chief Information Officers (ACIO). As of July 8, 2016 the S1BA was approved by the California Health and Human Services' ACIO. LFS continues to work with the Department's ITSD on the Stage 2 Alternative Analysis (S2AA), which is estimated to be completed by December 31, 2016.

  • Response Type†: 1-Year
  • Estimated Completion Date: June 2018
  • Response Date: September 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

In September 2015, CDPH launched the Laboratory Field Services Branch (LFS)' new online personnel licensing system (PERL). This is the baseline system that in subsequent phases will be expanded to include complaints tracking, and moving facilities licensing online. LFS continues to work with the Department's Information Technology Systems Division on the Stage One Business Analysis (S1BA), which will be completed by March, 2016.

This initiative will support the restructure of LFS by replacing the substantially paper-based processes with information technology solutions that will enable online applications, and allow recording and tracking of facility licensure, registration, ownership, complaint tracking, enforcement tracking, required inspection scheduling, proficiency testing tracking, and management reports. This redesign will enable LFS to be compliant with state law, as well as comply with the CSA recommendations, while also improving the quality and timeliness of services provided to facilities. Once complete, the redesign will enable LFS to provide more accurate and timely information about clinical and public health laboratory performance. This information will assist health care consumers and provide transparency and accountability of licensed and registered facilities. Further, the redesign will enable LFS to achieve greater staff efficiencies by eliminating a substantively paper-based, and time-consuming, tracking activities that currently take place.

  • Response Type†: 6-Month
  • Estimated Completion Date: 07/31/2018
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

In September 2015, CDPH launched LFS' new online personnel licensing system (PERL). This is the baseline system that in subsequent phases will be expanded to include or tracking complaints, and moving facilities licensing online. CDPH continues to actively recruit state staff to support the current and future PEGA Enterprise applications for development, maintenance and operations. In the short term ITSD has engaged the services of a contractor to provide support for the PEGA Enterprise platform and maintenance and operations of the existing applications. ITSD plans to hire a contractor to assist in the development of the requirements and functional design required to develop the facilities licensing and complaint phase.

  • Response Type†: 60-Day
  • Estimated Completion Date: September 30, 2017
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.


Recommendation #10 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should update and develop its regulations as necessary to ensure consistency with existing state law.

Agency Response*

LFS continues to meet regularly with the Clinical Laboratory Technical Advisory Committee (CLTAC) regulations sub-committee to review regulation packages to provide feedback to LFS. The sub-committee met 16 times in State Fiscal Year (SFY) 2016/17.

During SFY 16/17, in partnership with the Office of Legal Service and the Office of Regulations, LFS has completed an additional two regulation packages: "1050 Repeal Part 1", and one related to establishing a, "CLIA Crosswalk, Part 1". In July, 2017, "1050 Repeal Part 2" was completed. In addition, the Tissue Bank "Sperm Washing" package is in the public comment period, which ends on September 5, 2017.

To date, LFS has one facilities-related regulation package remaining to be completed, one tissue bank-related regulations package, and the four personnel licensing regulations packages.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: June 2019
  • Response Date: September 2017

California State Auditor's Assessment of Status: Partially Implemented


Agency Response*

To ensure that Laboratory Field Services (LFS) develops regulations as necessary, the department dedicated staff in LFS and the department's Office of Legal Services to coordinate and work on regulatory needs for LFS. To ensure local stakeholder feedback is received and considered on regulation needs and changes, the Clinical Laboratory Technical Advisory Committee (CLTAC) organized a separate subcommittee to review regulation packages and provide feedback to LFS. The subcommittee met over 12 times in State Fiscal Year 2015/2016 and has provided comments and suggestions to proposed regulations to CLTAC and LFS.

The department continues to make progress on addressing regulation packages noted in the audit report and has completed actions to repeal outdated state regulations, and developed internal controls to improve and maintain its tracking and monitoring of LFS regulatory needs. In addition, the department has split the Clinical Laboratory Personnel Standards regulation package into four separate packages in order to minimize the complexity of the package to ensure better stakeholder engagement and to ensure that forward momentum on completing the packages can continue.

  • Response Type†: 1-Year
  • Estimated Completion Date: January 2019
  • Response Date: September 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

LFS and legal staff have formalized an interactive process to identify regulation needs by organizing a separate CLTAC subcommittee representative of stakeholders specific to LFS regulations to provide feedback to LFS during the regulations process. The regulations process team consisting of staff from CDPH Budget, OLS, and LFS met February 3, 2015 to discuss tissue bank regulations.

Laboratory Field Services (LFS) is working with Department's Office of Legal Services (OLS) to provide staff for all outstanding regulation needs. In June 2015, one attorney was hired to specifically work on regulation packages for LFS, and one additional attorney serves as LFS in house counsel who is also working on regulation packages as of August 2015.

  • Response Type†: 6-Month
  • Estimated Completion Date: 01/01/2019
  • Response Date: March 2016

California State Auditor's Assessment of Status: Pending


Agency Response*

Working internally, with staff in LFS, legal staff and staff dedicated to regulations, CDPH has continued its collaborative efforts to develop, monitor and promulgate LFS's regulation packages through the rulemaking process. Two CDPH attorneys, in coordination with LFS, are dedicated to LFS to draft the regulation documents. LFS and legal staff are researching methods to formalize an interactive process to identify regulation needs. Ongoing completion of numerous regulations packages will be completed over the next few years. CDPH expects the final filing for the last scheduled regulations package to be complete by January 1, 2019.

  • Response Type†: 60-Day
  • Estimated Completion Date: January 1, 2019
  • Response Date: November 2015

California State Auditor's Assessment of Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.


Recommendation for Legislative Action

To eliminate the State's redundant and ineffective oversight of labs and to ensure labs do not pay unnecessary or duplicative fees, the Legislature should repeal existing state law requiring that labs be licensed or registered by Laboratory Services and that Laboratory Services perform oversight of these labs. Instead, the State should rely on the oversight the Centers for Medicare and Medicaid Services provides.

Recommendation for Legislative Action

To eliminate the State's redundant and ineffective oversight of labs and to ensure labs do not pay unnecessary or duplicative fees, the Legislature should repeal existing state law requiring labs to pay fees for state-issued licenses or registrations.

Recommendation for Legislative Action

If the Legislature decides to continue requiring that clinical labs be licensed or registered through the State, it should amend state law establishing how Laboratory Services annually adjusts its fee amounts to ensure the revenue it collects does not exceed the cost of its oversight. Such an amendment might authorize Public Health to temporarily suspend or reduce fees when the Clinical Laboratory Improvement Fund's ending balance exceeds a prudent reserve amount that the Legislature establishes.

Recommendation for Legislative Action

Regardless of whether it decides to repeal existing law, the Legislature should direct Laboratory Services to advise it on how best to address the millions of dollars in the Clinical Laboratory Improvement Fund in excess of a prudent reserve.

All Recommendations in 2015-507

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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