Report 2018-102 Recommendation 4 Responses

Report 2018-102: Tulare Local Healthcare District: Past Poor Decisions Contributed to the Closure of the Medical Center, and Licensing Issues May Delay Its Reopening (Release Date: October 2018)

Recommendation #4 To: Tulare Local Healthcare District

To ensure that the district recovers funds inappropriately used to pay for work outside the district, it should immediately take steps to seek reimbursement from HCCA for payments the district made to HCCA for time the former CFO and other employees spent working at Inyo.

6-Month Agency Response

The district did not submit a response.

  • Completion Date: December 2018
  • Response Date: September 2019

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

In its 60-day response, submitted in December 2018, the district indicated it had settled competing claims with HCCA, and that reimbursement from HCCA for work performed unrelated to the district was part of that settlement. However, the district's 60-day response was incomplete. In August 2019 the district provided us its settlement agreement with HCCA. Our analysis of that settlement agreement found that, rather than obtaining reimbursement from HCCA for inappropriate payments as we recommended, the district instead agreed, as part of its settlement, to release HCCA from any and all claims the district had on it, effectively cutting off the district's ability to seek reimbursement from HCCA.

60-Day Agency Response

The District settled competing claims with HCCA. Reimbursement from HCCA for work performed unrelated to the District was part of that settlement. It is our understanding the criminal investigation by the Tulare County District Attorney's office may include this issue.

  • Completion Date: December 2018
  • Response Date: December 2018

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

The district did not provide documentation to substantiate its response of fully implemented. We will reassess the district's response after it provides us with documentation of the settlement between it and HCCA.

  • Auditee did not substantiate its claim of full implementation

All Recommendations in 2018-102

Agency responses received are posted verbatim.