Report 2017-117 Recommendation 6 Responses

Report 2017-117: Mental Health Services Act: The State Could Better Ensure the Effective Use of Mental Health Services Act Funding (Release Date: February 2018)

Recommendation #6 To: Health Care Services, Department of

To ensure that local mental health agencies appropriately spend MHSA funds, Health Care Services should publish its proposed regulations in the California Regulatory Notice Register by September 2018. It should then develop and implement an MHSA fiscal audit process, independent of the Medi-Cal reviews, to review revenues and expenditures for the most recent fiscal year.

6-Month Agency Response

DHCS continues to develop the draft audit and appeal regulations package for the provision of fiscal audits and program oversight. DHCS expects to submit the public notice that announces these proposed regulations and initiates the 45-day public comment period to OAL for publication in the California Regulatory Notice Register by spring 2019.

  • Estimated Completion Date: Spring 2019
  • Response Date: September 2018

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


60-Day Agency Response

DHCS continues to develop the draft audit and appeal regulations package for the provision of fiscal audits and program oversight. DHCS expects to submit the public notice that announces these proposed regulations and initiates the 45-day public comment period to the Office of Administrative lay for publication in the California Regulatory Notice Register by spring 2019.

  • Estimated Completion Date: Spring 2019
  • Response Date: May 2018

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

We are concerned that Health Care Services now intends to wait until Spring 2019 to submit its proposed regulations for fiscal audits. As noted in our audit, Health Care Services has not provided an explanation for the delay in submitting its proposed regulations to the Office of Administrative Law to begin the process of establishing regulations. As recently as February 2018, Health Care Services stated to us that it intended to submit its regulations for review by September 2018. As we state on page 13 of our audit, Health Care Services cannot claim either lack of funding or time as a cause for the delay: Health Care Services has spent from $7.9 million to $8.6 million annually over the past four fiscal years to administer the MHSA and it has had statutory authority to develop necessary regulations since 2012. However, it only began drafting these regulations in 2016. Given the funding it has received and the amount of time that has elapsed since it became responsible for developing these regulations, we believe Health Care Services should already have taken appropriate action

Further, Health Care Services should develop and implement a meaningful MHSA fiscal audit process, independent of the Medi-Cal reviews, to review revenues and expenditures for the most recent fiscal year.


All Recommendations in 2017-117

Agency responses received are posted verbatim.