The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report of the Department of Rehabilitation’s (Rehabilitation) grant process. Rehabilitation works in cooperation with nonprofit agencies to provide services, such as career education and training, assistive technology, and independent living skills training to individuals with disabilities. This report describes the results of our examination of Rehabilitation’s process to solicit grant applications, evaluate applications and award grants, and review any appeals, for a selection of grants awarded to these agencies during fiscal years 2014–15 through 2017–18.
This report concludes that Rehabilitation’s inadequate guidance and oversight of the grant process led to inconsistencies and, in certain cases, perceived bias in its evaluations and awards of some grants. Although required to have procedures in place, Rehabilitation failed to formalize a process for soliciting and awarding grants, which resulted in numerous shortcomings and inconsistencies. For instance, Rehabilitation did not clearly define the roles and responsibilities of staff involved in the grant process to ensure they knew how to carry out the process. It also did not adequately solicit stakeholder feedback in developing the requests for applications (RFAs) for most of the grants we reviewed, and the RFAs did not always include adequate scoring criteria, or descriptions of the evaluation, award, and appeals processes. Additionally, Rehabilitation’s poor records management and it not ensuring that staff complied with its records retention policy contributed to its failure to appropriately respond to some public records requests.
As it relates to the evaluation of applications, we found that Rehabilitation failed to publish solicitations for individuals evaluating the grant applications (evaluators) and ensure they were free from bias and, for one grant, selected evaluators with previous ties to one of the applicants—creating at least the appearance of potential bias. Rehabilitation also failed to demonstrate that it provided adequate training or written instructions to its evaluators to ensure they understood the evaluation process, including how to score grant applications. This contributed to some scoring inconsistencies, and Rehabilitation sometimes convened new evaluation panels to rescore applications without rectifying the issues that caused the inconsistencies in the original scoring. Without adequate oversight of the grant process, Rehabilitation lacks assurance that staff and evaluators adhered to its grant process, and that it can demonstrate the process was followed as intended.
We found that Rehabilitation’s grant review committees responsible for reviewing appeals did not adequately review each appeal, such as for potential evaluator prejudice and whether evaluators’ scores were supported by evidence, as suggested by its grant manual. Further, regarding an appeal of one grant award, a grant review committee made recommendations to Rehabilitation upon identifying deficiencies in the grant process; however, Rehabilitation chose not to address these recommendations and allowed some errors to persist through the subsequent evaluation and award.
ELAINE M. HOWLE, CPA