(CN) — As cases of Covd-19 infections have spiked in California, so too has State Auditor Elaine Howle’s concern regarding the state’s mismanagement of $71 billion in federal Covid funding.
An audit Thursday revealed mismanagement by the state's Finance, Employment Development and Public Health departments remained at the top of the list of issues which pose a risk to the state’s financial health.
The biennial assessment of issues and agencies that are high risk for waste, fraud, abuse or mismanagement included seven top issues and five state agencies. Among them are management of federal Covid funding, water infrastructure, information security, the Department of Corrections, Technology Department and Health Care Services Department, as well as others.
California’s management of Covid-19 dollars was first identified by the auditor as a high-risk statewide issue in August 2020 based on the significant amount of funding granted to the state and the rapid nature through which funds were allocated to various state departments and programs.
But most of the state agencies identified as managing federal Covid funding explained to the auditor they didn’t believe their management of the funding was high-risk to California, mostly due to existing federal funding monitoring mechanisms already in place.
The Finance Department in particular, indicated it didn’t believe the state’s management of Covid funds met the criteria regarding high-risk issues.
Howle disagreed.
“Although we appreciate Finance’s perspective, given that the purpose of federal Covid-19 funds is to help Californians through a life-threatening pandemic that has upended the economy, and because we found cases in which these funds were mismanaged by state agencies, in our professional judgment, the risk of serious detriment is high,” she wrote in the audit.
It remained on the high-risk list Thursday due to mismanagement of federal funding by the Finance, Employment Development and Public Health departments.
In January, the state auditor reported the Finance Department’s allocation of federal Coronavirus Relief Fund dollars had resulted in smaller counties receiving significantly less funding per person than larger counties, even though the financial needs of smaller counties were the same if not greater than their larger counterparts.
The audit also found because the Employment Development Department delayed automating an antifraud measure four months into the pandemic and failed to investigate unemployment claims from suspicious addresses, it may have paid out $10.4 billion for fraudulent claims.
As for the Public Health Department’s oversight of $467 million in federal Covid funding, although the auditor found California had met or exceeded targets for testing individuals for the coronavirus, it had lagged on contact tracing by employing less staff than expected.
The audit also took the California Department of Technology to task for failing to implement an effective project planning mechanism — the Project Approval Lifecycle — to mitigate risks of failure for complicated statewide IT projects.
California’s state court system knows all-too-well how expensive IT project debacles can be: In 2012, the Judicial Council had to pull the plug on its 10-year project to develop the Court Case Management System, which sought to connect the state’s 58 trial courts through one unifying computer system.
While the state has moved past the CCMS debacle, the state auditor has expressed concern over state IT projects and oversight in implementing the California Medicaid Management Information System.
California’s oversight of K-12 education funding, which was previously identified as a high-risk, was removed from the list because the State Board of Education made significant progress toward controlling risk factors including implementing the auditors 2019 recommendations on oversight related to the local control funding formula.
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