Report 2018-102 Recommendation 8 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 #8 To: Tulare Local Healthcare District
To ensure that it uses bond proceeds for allowable purposes and improves its consistency and accountability in processing payments from bond proceeds, by April 2019 the district should formalize and document policies and procedures for verifying that it uses bond proceeds for allowable purposes and for approving expenditures paid from general obligation bond proceeds.
1-Year Agency Response
Written policy approved by the Tulare Local Healthcare District Board on 24 April 2019.
- Completion Date: May 2019
- Response Date: May 2019
California State Auditor's Assessment of 1-Year Status: Partially Implemented
Although the district implemented a policy requiring the CEO and CFO to submit a report to the Board for approval of expenditures, the District does not provide any procedures or guidance as to the contents of that report or the specificity of the information it should contain. It also does not establish procedures to address how the district plans on verifying that bond proceeds are used for allowable purposes.
- Auditee did not address all aspects of the recommendation
6-Month Agency Response
We were delayed in bringing on new staff to implement the appropriate recommendations, but Board members are working to amend our policies and hope to approve them at our next regular board meeting on April 24.
- Estimated Completion Date: April 2019
- Response Date: April 2019
California State Auditor's Assessment of 6-Month Status: Pending
60-Day Agency Response
The District no longer has bond funds. Establishing a policy by April 2019 in anticipation that the District will seek bond financing at some indeterminate time in the future would require the District to anticipate the requirements of unknown bondholders at an unknown time in the future.
The District concurs with the substance of the recommendation and will update its policies in accordance with the recommendation prior to the receipt of any future bond funds.
- Estimated Completion Date: when new bonds issued
- Response Date: December 2018
California State Auditor's Assessment of 60-Day Status: No Action Taken
We do not agree with the district's statement that establishing a policy by April 2019 requires the district to anticipate requirements that are unknown. The district can and should formalize and document policies and procedures for verifying that it uses bond proceeds for allowable purposes and for approving expenditures. The specific allowable purposes can be defined at the time of bond issue but would be evaluated in the already established policies and procedures. Lacking such policies and procedures, the district risks that it could again spend bond funds inappropriately, similar to those we identified in our audit report.
Agency responses received are posted verbatim.