Report 2019-046 Recommendation 2 Responses

Report 2019-046: Proposition 56 Tobacco Tax: State Agencies' Weak Administration Reduced Revenue by Millions of Dollars and Led to the Improper Use and Inadequate Disclosure of Funds (Release Date: January 2021)

Recommendation #2 To: Health Care Services, Department of

To provide the public with relevant information and ensure the level of accountability that state law intends, each state entity that receives Proposition 56 funds should publish the following information on its website by April 2021 for fiscal years 2017-18 through 2019-20, and within six months of the end of each fiscal year, beginning with fiscal year 2020-21:

The amount of Proposition 56 funds received by each program it administers.
The amount of Proposition 56 funds spent by each program it administers.
The amount of Proposition 56 funds obligated for future expenditures by each program it administers.
Any corrections to the information it reported in previous fiscal years.

1-Year Agency Response

Added the "Future Obligation" column to the posted spreadsheets for fiscal years 17/18, 18/19, 19/20, and 20/21. Included the "Future Obligation" column to the spreadsheet for FY 21/22 and forward. Final/approved spreadsheets can be found at the following link: DHCS' California Proposition 56 webpage.

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

Health Care Services' website currently includes the relevant information, but its website did not have the information available when we checked in January 2022 to verify its response. Although we consider the recommendation to be implemented, in the future Health Care Services should publish the relevant information within six months of the end of the fiscal year.

6-Month Agency Response

DHCS has developed a webpage for the Proposition 56 funds received by each program administered. The data currently includes the amount of Proposition 56 funds received and spent by each program administered for State Fiscal Years 2017-18 and 2018-19. We have updated the webpage to include State Fiscal Year 2019-20 financial information, in addition to including funds obligated for future expenditures by program. Any corrections to the financial information reported by DHCS for previous fiscal years will be reflected in the current year as the fund operates on a cash basis.

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

DHCS' posted information includes the amounts received and spent, but does not include the amounts obligated for future expenditures.

60-Day Agency Response

DHCS has developed a webpage for the Proposition 56 funds received by each program administered. The data currently includes the amount of Proposition 56 funds received and spent by each program administered for State Fiscal Years 2017-18 and 2018-19. We will update the webpage to include State Fiscal Year 2019-20 financial information, in addition to include funds obligated for future expenditures by program. Any corrections to the financial information reported by DHCS for previous fiscal years will be reflected in the current year as the fund operates on a cash basis.

California State Auditor's Assessment of 60-Day Status: Pending

Health Care Services' webpage presents the information we reviewed during the audit. We noted no new information. We will review the funds obligated for future expenditures and fiscal year 2019-20 financial information when Health Care Services makes them available.

All Recommendations in 2019-046

Agency responses received are posted verbatim.