Report 2019-046 Recommendations

When an audit is completed and a report is issued, auditees must provide the State Auditor with information 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. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below, is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor's assessment of auditee's response based on our review of the supporting documentation.

Recommendations in 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)

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Recommendations to Education, Department of
Number Recommendation Status
1

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.

10

To ensure that it applies sufficient funding to address tobacco-related health disparities, by June 2021, Education should establish a formal procedure for meeting the requirement that it spend at least 15 percent of the Proposition 56 revenues funding its TUPE program to accelerate and monitor the rate of decline in tobacco-related health disparities.

16

To obtain its full share of the fiscal year 2017-18 Proposition 56 revenues, Education should negotiate with Finance and Public Health to ensure that it receives the full amount of its proportional share of the fiscal year 2017-18 Proposition 56 funds.

Recommendations to Health Care Services, Department of
Number Recommendation Status
2

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.

11

To ensure that the State benefits from its use of Proposition 56 funds, Health Care Services should, by June 2021, implement a policy to establish formal processes for granting all funds, regardless of whether a program receives a one-time allocation or is ongoing. The policy should require sufficient criteria to ensure that the funds awarded provide the benefit intended by the program.

12

To ensure that it awards funds to applicants who address the need for providers in health professional shortage areas, Health Care Services should amend its application selection process to require by June 2021 that all participants practice in geographic areas that have shortages of such health care professionals, and annually verify that participants continue to practice in such areas.

13

To ensure that participants are serving the agreed-upon Medi-Cal patient caseloads, Health Care Services should finalize its formal process by June 2021 to verify the caseload percentage that participants self-report.

Recommendations to Justice, Department of
Number Recommendation Status
3

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.

14

To ensure that it awards Proposition 56 funding in accordance with the requirements in state law, Justice should implement a formal grant application review process by June 2021 that ensures that it does not award Proposition 56 funds for purposes—such as education and outreach—that are not described in the law governing its use of funds.

Recommendations to Public Health, Department of
Number Recommendation Status
4

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.

15

To ensure that it applies sufficient funding to address tobacco-related health disparities, by June 2021, Public Health should establish a formal procedure for meeting the requirement that it award at least 15 percent of the Proposition 56 revenues funding its Tobacco Control Program to accelerate and monitor the rate of decline in tobacco-related health disparities.

17

To reduce the risk of exceeding Proposition 56's limit on the use of funds for administrative costs, Public Health should, by June 2021, develop and implement a procedure for verifying that its combined administrative costs for its Proposition 56-funded programs do not exceed 5 percent.

Recommendations to Tax and Fee Administration, California Department of
Number Recommendation Status
5

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.

7

To increase the accuracy of its calculation of the tax rate for other tobacco products, CDTFA should take the following steps to update its methodology for calculating the tax by March 2021: Include nonpremium cigarettes in its calculation of the average manufacturer wholesale cigarette price.

8

To increase the accuracy of its calculation of the tax rate for other tobacco products, CDTFA should take the following steps to update its methodology for calculating the tax by March 2021: Determine the current wholesale markup rate for cigarettes and use this rate when calculating the tax rate for other tobacco products.

9

To ensure that the other tobacco products tax rate accurately reflects changes in the wholesale price of cigarettes, CDTFA should enact a policy to obtain the current wholesale markup rate for cigarettes no less than every three years and to incorporate this number in its calculation of the tax rate.

18

To provide public accountability for the Proposition 56 funds it receives, CDTFA should publish on its website information about the Proposition 56 funds that it receives and spends in a manner that allows the public to easily find the information and that does not restrict the public's access.

Recommendations to Tobacco Education and Research Oversight Committee
Number Recommendation Status
19

To ensure that the Legislature has the knowledge necessary to make informed decisions about tobacco tax-funded programs, TEROC should produce the annual report each year, as state law requires.

20

To ensure that it is meeting the Legislature's expectations, TEROC should either provide the master plan to the Legislature every two years, as state law requires, or seek legislative change to reduce the frequency with which it is required to produce the master plan.

Recommendations to University of California
Number Recommendation Status
6

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.



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