Report 2018-102 Recommendation 9 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 #9 To: Tulare Local Healthcare District

To ensure that it maintains adequate oversight of expenditures from any future bond proceeds, by April 2019 the district should establish a formal policy to include, as part of the charter for any future bond oversight committee, a requirement that the committee review bond expenditures quarterly at a minimum. The policy should also require the committee to report the results of its reviews to the board quarterly.

1-Year Agency Response

Written policy approved by the Tulare Local Healthcare District Board on 24 April 2019.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

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.

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

60-Day Agency Response

The District concurs with the recommendation. However, even assuming the District seeks future bond funding, establishing a policy by April 2019 would require the District to anticipate the requirements of unknown bondholders at an indeterminate time in the future. The District will update its policies in accordance with the recommendation prior to the receipt of any future bond funds.

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 a requirement that the committee review bond expenditures quarterly, and that the committee report the results of its reviews to the board quarterly. The district's policy should be the district's minimum in terms of monitoring future bond expenditures—any specific requirements of any future bondholders should be performed in addition to the district's minimum requirements.

All Recommendations in 2018-102

Agency responses received are posted verbatim.