Report 2014-118 All Recommendation Responses

Report 2014-118: California Department of Developmental Services: Its Process for Assessing Fees Paid by Parents of Children Living in Residential Facilities Is Woefully Inefficient and Inconsistent (Release Date: January 2015)

Recommendation for Legislative Action

To help ensure that fees under Developmental Services' Parental Fee Program are fair, the Legislature should require that the department's initial fee assessments, redeterminations, and its appeal-related evaluations be based upon the same information, and should require that parents have the opportunity to challenge Developmental Services' previous calculations for accuracy and completeness on appeal, and that any adjusted fee should be based on the approved fee schedule and not simply on the judgment of department staff. Before enacting this legislation, state lawmakers should verify that Developmental Services has reviewed and revised its initial fee assessment and redetermination process to clarify what expenses will be considered when determining whether parents qualify for fee reductions.

Description of Legislative Action

AB 564 (Chapter 500, Statutes of 2015), effective July 1, 2016: 1) calculates monthly parental fees based on a percentage of the parents' annual income and authorizes a credit of the equivalent of one day of the monthly parental fee for each day a child spends six or more consecutive hours in a 24-hour period on a home visit; 2) prohibits a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less; and 3) requires, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee to be calculated at the time of the parents' annual fee recalculation or within 60 days of a parental request for review by the department and receipt of the family's completed family financial statement.

California State Auditor's Assessment of 1-Year Status: Legislation Enacted

Description of Legislative Action

Assembly Bill 564 (Chapter 500, Statutes of 2015), effective July 1, 2016, calculates the monthly parental fee based on a percentage of the parents' annual income and authorizes a credit of the equivalent of one day of the monthly parental fee for each day a child spends six or more consecutive hours in a 24-hour period on a home visit. Appeals of a parental fee may be made only to dispute the family income used and the denial or amount of credit. Further, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee is required to be calculated at the time of the parents' annual fee recalculation or with 60 days of a parental request for review by the Department of Developmental Services and receipt of the family's completed family financial statement.

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

Recommendation #2 To: Developmental Services, Department of

To ensure timelier fee assessments, Developmental Services should hold regional centers accountable for providing the monthly placement reports and copies of information letters required by state regulations. To encourage compliance, Developmental Services should specify in its regional center contracts that noncompliant regional centers will pay financial penalties equal to the amount of revenue lost because of their inaction.

Annual Follow-Up Agency Response From October 2021

As indicated in prior updates, the department will not implement this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2020

While the Department has implemented actions to improve the timeliness of parental fee assessments as briefly described below, it will not implement this specific recommendation to impose financial penalties against regional centers (RCs). The alternative actions taken by the Department are more efficient and effective to ensure timelier fee assessments.

As reported in prior follow-up responses, the Department has conducted outreach to RCs on Parental Fee Program (PFP) requirements, added the PFP law and regulation citations in RC contracts, added testing of PFP to the Department's RC audit scope, and established a list of PFP contact liaisons at each RC. In addition, the Department implemented an automated information system to identify potential parents. This automated data source automatically reports to the Department when consumers are placed out of the home and services are paid by the state. Further, the Department issued a memorandum to RC executive directors reminding them of the requirements that RCs provide the required information to the parents in accordance with the current regulations. In addition, our Parental Fee population has risen over the past three years due to internal improvement at identifying eligible consumers, along with program staff's regular interaction with RCs helping to facilitate better exchange of relevant data.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2019

While the Department has implemented actions to improve the timeliness of parental fee assessments as briefly described below, it will not implement this specific recommendation to impose financial penalties against regional centers (RCs). The alternative actions taken by the Department are more efficient and effective to ensure timelier fee assessments.

As reported in prior follow-up responses, the Department has conducted outreach to RCs on Parental Fee Program (PFP) requirements, added the PFP law and regulation citations in RC contracts, added testing of PFP to the Department's RC audit scope, and established a list of PFP contact liaisons at each RC. In addition, the Department implemented an automated information system to identify potential parents. This automated data source automatically reports to the Department when consumers are placed out of the home and services are paid by the state. Further, the Department issued a memorandum to RC executive directors reminding them of the requirements that RCs provide the required information to the parents in accordance with the current regulations. In addition, our Parental Fee population has risen over the past three years due to internal improvement at identifying eligible consumers, along with program staff's regular interaction with RCs helping to facilitate better exchange of relevant data.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Outreach to regional centers, adding the parental fee program to the department's regional center contracts and audits, and implementing an automatic reporting system are positive steps to ensure timelier fee assessments. However, these steps can be taken in addition to, not instead of, establishing financial penalties for regional centers that do comply with program requirements. In fact, an established penalty for noncompliance would only make the department's reminders and audits more effective at implementing this statutorily-mandated program of cost sharing. Further, in its response, the department does not explain why it believes the alternative steps it has taken are more efficient and effective. Surely, the imposition of penalties when warranted would support its efforts to ensure that regional centers comply with program requirements.

Annual Follow-Up Agency Response From November 2018

While the Department has implemented actions to improve the timeliness of parental fee assessments as briefly described below, it will not implement this specific recommendation to impose financial penalties against regional centers (RCs). The alternative actions taken by the Department are more efficient and effective to ensure timelier fee assessments.

As reported in prior follow-up responses, the Department has conducted outreach to RCs on Parental Fee Program (PFP) requirements, added the PFP law and regulation citations in RC contracts, added testing of

PFP to the Department's RC audit scope, and established a list of PFP contact liaisons at each RC. In addition, the Department implemented an automated information system to identify potential parents. This automated data source automatically reports to the Department when consumers are placed out of the home and services are paid by the state. Further, the Department issued a memorandum to RC executive directors reminding them of the requirements that RCs provide the required information to the parents in accordance with the current regulations. In addition, our Parental Fee population has risen over the past three years due to internal improvement at identifying eligible consumers, along with program staff's regular interaction with RCs helping to facilitate better exchange of relevant data.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Outreach to regional centers and adding the parental fee program to the department's regional center audits are positive steps. However, these steps can be taken in addition to, not instead of, establishing financial penalties for regional centers that do comply with program requirements. In fact, an established penalty for noncompliance would only make the department's reminders and audits more effective at implementing this statutorily-mandated program of cost sharing.

Annual Follow-Up Agency Response From December 2017

While the Department has implemented actions to improve the timeliness of parental fee assessments as briefly described below, it will not implement this specific recommendation to impose financial penalties against the regional centers. The alternative actions taken by the Department are more efficient and effective to ensure timelier fee assessments.

As reported in prior follow-up responses, the Department has conducted outreach to regional centers on Parental Fee Program (PFP) requirements, added the PFP law and regulation citations in the regional center contracts, added testing of PFP to the Department's regional center audit scope, and established a list of PFP contact liaisons at each regional center. In addition, the Department implemented an automated information system for identification of potential parents. This automated data source automatically reports to the Department when consumers are placed out of the home and services are paid by the state. Further, the Department issued a memorandum to regional center executive directors reminding them of the requirements that regional centers provide the required information to the parents in accordance with the current regulations.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

In its response, the Department does not explain why it will not impose financial penalties on noncompliant regional centers. Surely, the threat and, at times, imposition of penalties would support its efforts to ensure that regional centers comply with program requirements.

Annual Follow-Up Agency Response From October 2016

While the Department has implemented actions to improve the timeliness of parental fee assessments as briefly described below, it will not implement this specific recommendation to impose financial penalties against the regional centers. The alternative actions taken by the Department are more efficient and effective to ensure timelier fee assessments.

As reported in prior follow-up responses, the Department has conducted outreach to regional centers on Parental Fee Program (PFP) requirements, added the PFP law and regulation citations in the regional center contracts, added testing of PFP to the Department's regional center audit scope, and established a list of PFP contact liaisons at each regional center. More recently, the Department implemented an automated information system for identification of potential parents. This automated data source is designed to automatically report to the Department when consumers are placed out of the home and services are paid by the state. In addition, the Department issued a memorandum to regional center executive directors reminding them of the requirements that regional centers provide the required information to the parents in accordance with the current regulations.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

1-Year Agency Response

- The Department has commenced with development of a new IT platform to assist with program administration. This platform development is intended to include more automated interaction with regional center data systems to assist in automated reporting of program required data for program administration. The resulting system is intended to automate regulatory mandated information exchange. These efforts will be affected by implementation of revised program requirements as included in AB564 set to be enacted on July 1, 2016.

- The Department is continuing regular interaction with regional centers monthly to ensure program eligible families are identified as required by regulation.

- Revised program literature outlining regional center requirements is currently being drafted in anticipation of enactment of AB564 on July 1, 2016.

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

Although Developmental Services has marked this recommendation as fully implemented, the IT program that will create automated reporting of program required data for program administration is still in development.

6-Month Agency Response

- The Department continues discussions with the Association of Regional Center Agencies (ARCA) and regional centers to further its efforts of gaining full compliance with the reporting requirements contained in regulation.

- Pending implementation of an automated data exchange, the Department will conduct a periodic account population survey between program staff and regional centers to improve timely and accurate reporting of program eligible parents.

- To assist regional centers in complying with regulations, the Department is drafting new literature for use with parents by regional center staff which describes in detail program requirements and parental, department and regional center responsibilities.

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

60-Day Agency Response

60-Day Report Response: The Department has begun implementation of many of the recommendations outlined in the Audit Response as follows:

- The Department continues to communicate on a periodic basis with regional center (RC) Chief Counselors, Chief Administrators, and Executive Directors of RC obligations for the Parental Fee Program (PFP).

- Amended RC contract language highlighting RC responsibilities in law and regulations for the PFP have been executed.

- The Department's RC audit protocol now includes testing for requirements under the PFP, and PFP audit results will be provided to program staff for additional analysis and action as needed.

- The Department has increased its daily/weekly interaction with identified RC contacts to facilitate improved understanding of RC reporting and administrative requirements under the program; and ongoing development of improved reporting tools for use by RCs.

- Review of the November 2014 RC survey results has been completed. Areas of improvement in data reflected on the individual files have been noted, and the Department is in discussion with the Association of Regional Center Agencies (ARCA) to implement the improvements.

- The Department continues to work closely with ARCA to improve RC understanding of roles and responsibilities within the program. These efforts include ongoing development of best practices for exchange of required data between RC and the Department.

- The Department continues to follow-up with RCs who are unable to provide required data in a timely manner. We continue to review more streamlined and efficient methods for the monthly follow-up.

- The Client Financial Services (CFS) Program Manager and key staff meet weekly with the Branch Manager and Section Chief to provide program status and updates of ongoing improvement efforts.

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

Recommendation #3 To: Developmental Services, Department of

To make the initial parental fee assessment and annual redetermination processes more efficient, consistent, and transparent, Developmental Services should determine, as part of a formal policy development process, what family expenses it will consider in its determination of parental fees and what components of the fee determination require documentation from the parents. Developmental Services should then clearly communicate these policies to parents and staff and should reinforce these policies with regular management review of fee assessments.

1-Year Agency Response

AB564 was signed into law by the Governor on October 5, 2015. This legislation removed the client related expenses from consideration during the Parental Fee determination process. AB564 becomes effective on July 1, 2016. The Department continues to take the following steps to ensure consistency and efficiency when evaluating client expenses used for reduction of income for the purpose of fee assessment:

- Parental Fee Program Manager continues to review and approve all fee assessments, including client related expenses.

- Program staff has been fully trained on the program's policies as they relate to treatment of expenses being claimed by parents.

- The program's revised policy and procedure manual gives staff clear guidance on treatment of client related expenses.

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

6-Month Agency Response

On March 26, 2015, Assembly member Eggman sponsored AB 564 which, if passed as amended on July 17th 2015, significantly streamline the administration of the Parental Fee Program. The Department has been providing technical assistance during the hearing process for this proposed legislation and continues to monitor the bill's status. Some of the significant changes contained in this legislation that would affect the operational structure of the current program, effective July 1, 2017 include:

- A change in methodology for fee assessment requiring DDS to consider only a families gross annual income and family size for the purpose of fee setting. This bill would remove the current requirement that DDS consider various other client related expenses and major unusual expenses for the family in the fee setting process. Fees proposed under this legislation would be assessed on a sliding scale based upon percentage of income compared to the Federal Poverty Level, and would exempt a portion of the current program population.

- The bill would require that DDS consider only those items during the appeal that were considered during the initial fee setting calculation, thus, eliminating the current practice of a broader review of parent's income and expenses as recommended in the CSA report.

- The bill also provides the Department authority to grant parents a temporary waiver from paying the monthly fee if they demonstrate with receipts an unavoidable and uninsured catastrophic loss.

The Department is continuing in its efforts in program improvement and updates to the policies and procedures manual as reported in the March update of corrective actions. It is assumed that many of these improved processes will remain intact should AB 564 become law. The policies and procedures manual will be updated consistent with current statute.

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

60-Day Agency Response

60-Day Report Response: The Department has focused existing resources on a full review of program policies and procedures to address the recommendation that the determination of parental fee assessments be more efficient, consistent and transparent. Much of the work is centered on updating the program manual and this review and update of the manual is in process. By July 2015, DDS will determine if regulatory or statutory changes are necessary to implement recommendations and strengthen program administration.

Effective January 1, 2015, the CFS Program Manager has implemented weekly approval sessions with staff for the purpose of work product quality review, and approval of all rating activity for new and re-determined fee assessments.

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

Recommendation #4 To: Developmental Services, Department of

To ensure that the parental fee remains appropriate for each family's current financial condition, Developmental Services should complete annual redeterminations as specified in state regulations. To this end, department management should create a mechanism to determine which accounts have not had a redetermination as required and should follow up with staff to ensure that this work is completed.

1-Year Agency Response

The Department's standard practice is continuing its increased interaction between the program manager and lead analyst and staff to ensure timelines of annual determination process is completed monthly. Department CRS programming staff have implemented a process rule for program billing to automatically set non complying parent's accounts to the maximum fee as required by regulation when parents fail to return the required financial information for assessment. Program manager now conducts monthly review of program population reports to monitor annual redetermination of qualifying accounts.

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

Developmental Services has implemented a policy that helps ensure redeterminations are conducted in a timely manner. In addition, Developmental Services creates reports that the manager reviewed monthly to review the status of redeterminations.

6-Month Agency Response

The Department is continuing its increased interaction between the program manager and lead analyst to ensure timeliness of redetermination process monthly. Monthly redetermination statistics are a component of program's update report to be provided to the Section Chief, Branch Manager and Deputy Director beginning in August 2015.

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

60-Day Agency Response

60-Day Report Response: The CFS Program Manager is closely monitoring redetermination reports to ensure timely completion. A lead program analyst has been assigned to monitor monthly redetermination activity, and report status and any delays to the CFS Program Manager for follow-up. To increase the oversight of the timeliness and accuracy of this activity, the Department has a first draft of the reporting format for program status updates to the Branch Manager and Deputy Director. The Report will be modified as needed, based on the usefulness of the Report and issues that are identified.

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

Recommendation #5 To: Developmental Services, Department of

Developmental Services should eliminate inconsistency between the information it accepts and analyzes as part of the initial fee determination and the information it reviews as part of the appeals process. The fees reassessed during the appeals process should be based on an established fee schedule and should not be based solely on staff judgment. Any exceptions to the fee schedule should be justified in writing and approved by the program manager after thorough review.

1-Year Agency Response

The Department continues to work within current statutory and regulatory framework, where the initial fee determination and the appeal process consider different information. All information submitted for appeal is documented and approved by the program manager. This recommendation is met under AB564 which requires the Department to consider only similar information during the appeals process as that which was used in the initial fee determination process. These requirements go into effect on July 1, 2016.

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

As indicated by the department, AB 564 essentially implements our recommendation.

6-Month Agency Response

Pending statutory changes, the Department continues to work within the current statutory and regulatory framework, where the initial fee determination and the appeal process consider different financial information.

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

Developmental Services has marked this recommendation as Fully Implemented however, it is waiting for pending legislation to address the recommendation. Therefore, we have assessed this recommendation as Pending.

60-Day Agency Response

60-Day Report Response: As part of the formal policy and procedures review to be completed by July 2015, the Departments' legal staff is reviewing statutory and regulatory authority to better align the two processes. The CFS Program Manager has trained staff, and continues to monitor through weekly staff meetings and documentation requirements to ensure for accuracy and uniform application throughout the program population.

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

Recommendation #6 To: Developmental Services, Department of

To decrease the risk of determining appeal outcomes based on inaccurate information, Developmental Services should require management oversight and review of appeals. This review should include a review of appeal worksheets for accuracy prior to appeals committee meetings. To allow for a thorough management review, Developmental Services should require staff to note the reasoning for any adjustments to the calculation of parents' income and expenses.

6-Month Agency Response

The CFS Program Manager is continuing the quality control oversight listed in the Department's 60 day response. All appeals are reviewed by the Program Manager for accuracy and consistency prior to being heard by the appeal review committee.

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

60-Day Agency Response

60-Day Report Response: The CFS Program Manager now reviews all appeal analyst work produced for use by the committee, and verifies accuracy prior to submission of appeal for committee's review. Any adjustments made to income or expenses claimed in the appeals process now require manager approval and clear documentation of justification for adjustment. The analyst now provides a more detailed record of the analysis made of appeal documentation provided by a parent(s) which is contained in the Cost Recovery System (CRS) notations on parents account. Additionally, as the Department completes the formal policy review in conjunction with review of current law and regulations, there may be a need for statute or regulatory changes.

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

Recommendation #7 To: Developmental Services, Department of

Developmental Services should review its appeals process to ensure that it follows appeal-related timelines and follows a consistent process for accepting requests for appeals. As part of this effort, Developmental Services should add a date field to the appeals log for when parents are notified of the outcome of their appeal and should ensure that existing data fields contain accurate information.

6-Month Agency Response

The program is continuing its compliance efforts outlined in the Department's 60 day update to ensure timeliness of appeals filed by parents, and the maintenance of the program's appeal log. Monthly statistics of appeals are a component of program's monthly update report to be provided to the Section Chief, Branch Manager and Deputy Director beginning in August 2015.

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

Although Developmental Services marked this recommendation as Not Fully Implemented, it updated its appeal log to include a date field for when parents are notified of the outcome of their appeal. In addition, it provided the monthly update report that is reviewed by management. Therefore, we have assessed this recommendation as Fully Implemented.

60-Day Agency Response

60-Day Report Response: The Department has reviewed with staff the appeals-related timelines to ensure compliance with mandated requirements. The appeal log has been updated to include the date of notice to the parent(s). The CFS Program Manager now performs regular reviews of the appeal log to ensure necessary information is captured accurately and timely. The CFS Program Manager has drafted a monthly report format for reporting to the Branch Manager and the Deputy Director of Administration on the status of new and pending appeals to ensure timeliness of processing appeals is improved.

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

Recommendation #8 To: Developmental Services, Department of

Developmental Services should review and update its process for collecting on delinquent accounts. This update should include a revision to the policies and procedures manual, training for field agents, and regular management review to ensure consistent adherence to the policy. As part of the update, Developmental Services should clarify when to designate an account as uncollectible.

Annual Follow-Up Agency Response From December 2017

The Department has completed staff training and process implementation for regular collection activities required on past due program families in accordance with the program's process and procedure manual. Staff are now required to regularly identify those accounts that meet the program's requirements for collection action and carry out all collection activities prescribed under the program requirements. Past due accounts defined by the program manual receive both telephone and mail contact from the Department seeking resolution of past due balances, along with other administrative activities when identified. Accounts which are identified with unknown contact information are regularly researched by program staff using approved skip tracing methods. Those accounts which remain unpaid and meet all of the required criteria are now identified and submitted to the Franchise Tax Board's offset program regularly and are updated annually. All collection activities are monitored by the program manager with updated status reports provided to upper management quarterly. Accounts which are identified as uncollectable or are beyond the statute of limitations pursuant to California law are placed into suspended status through the administrative process then reviewed for potential write off when all avenues of collections have been exhausted.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We confirmed that the department has revised its policies and procedures manual to document the practices described in their response.

Annual Follow-Up Agency Response From October 2016

The Department has completed the staff realignment reported in prior updates and has begun to carry out collection activities in conformance with revised policies and procedures provided to the State Auditor. These activities include prescribed timelines for collection letters and phone calls to parents whose accounts remain in a delinquent status. In addition, the Department is currently identifying its full population of delinquent parental fee accounts that meet the criteria for the Franchise Tax Board's offset program to submit those accounts for offset during this calendar year's cycle set for submission in December 2016. Staff newly assigned to the program are being trained on past due collection requirements and expectations to fully implement requirements outlined in the program's policies and procedures. Accounts deemed uncollectable shall be referred for write-off in accordance with requirements by the State Controller's Office if it is determined future collection action will not result in payment or program compliance as outlined in the program's process and procedures. Full implementation of these activities is anticipated by January 1, 2017.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Delinquent account collection policies are outlined in the program revised policy and procedures manual, detailing increased consistency in program's collection process. Additionally, the Department is in process of a staff realignment which will transfer current southern California field analyst to Sacramento HQ offices for the purpose of providing an increased collection presence over delinquent accounts.

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

Developmental Services has updated its policies and procedures regarding delinquent accounts and is in the process of ensuring they have the proper staff to assist in collecting delinquent accounts.

6-Month Agency Response

The CFS Program Manager is continuing the practice of bi-weekly meetings with field agents to ensure timely collection efforts are being made on program's delinquent population as described in the Department's 60 day response. Further, the Department is continuing to explore other viable avenues for delinquent fee recovery through other methods not currently in practice. All program accounts which contain a past due balance will be reviewed for possible submission to the Franchise Tax Board under their tax offset program for delinquent fee recoveries.

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

60-Day Agency Response

60-Day Report Response:

- Program manual revisions are currently underway which will provide more specific direction as to analysts collection efforts on past due Parental Fee accounts.

- CFS Program Manager conducts bi-weekly meetings with field agents to discuss updates on collection activity, and to provide consistent feedback and direction, and to identify training as needed.

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

Recommendation #9 To: Developmental Services, Department of

To improve its administration of the Parental Fee Program, Developmental Services should engage in a formal policy development process that results in an updated policies and procedures manual by July 2015. The manual should clarify management expectations, describe regular program manager oversight, and include summary-level performance indicators that must be shared with department officials on an ongoing basis.

1-Year Agency Response

The Department has completed revisions to updated Policies and Procedures Manual as described in the 180 day report response. This manual will be available to program staff in printed form, as well as accessible on the department's intranet service.

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

We have reviewed the revisions to the policies and procedures manual and agree that it adequately implements our recommendation.

6-Month Agency Response

The Department is nearing completion of the full draft of the updated Policies and Procedures Manual. Upon approval, the updated manual is expected to contain clarifications of management expectation, program manager oversight and performance indicators as prescribed by the audit recommendation. Many of the clarified procedures included in the updated manual are currently being implemented into the program's daily activities and are being monitored by management for consistency. Also, the Department is hiring a retired annuitant, with broad administrative and program experience, to assist in tracking the final completion and review of the updated Policies and Procedures Manual and other corrective actions being taken

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

60-Day Agency Response

60-Day Report Response: Several chapters of the program manual have been reviewed and revised consistent with current law and regulation, with many first draft stages for review by the Department's Office of Legal Affairs and Executive Management. The Department conducts weekly management meetings to review specific questions and for guidance being developed.

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

Recommendation #10 To: Developmental Services, Department of

To efficiently locate records pertinent to the Parental Fee Program, Developmental Services should update its retention policy and centralize all the files and records supporting the program.

Annual Follow-Up Agency Response From October 2016

The PFP retention schedule previously reported as pending was approved effective December 31, 2015, and is now in effect. In addition, physical records used in all of program's rating activities are now maintained in the Sacramento headquarters office intact and in a secure location and will be maintained in this state until scanned for digital retention. This recommendation is fully implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

The Department's document retention schedule has been submitted for review and is currently pending final approval. The Department will continue use of its current electronic file archiving system under greater audit and management oversight control. Additionally, program staff now retains all physical program documents used in fee assessment and program administration functions until an audit has been completed by internal program personnel to ensure imaging has been verified. Document retention requirements are now part of the revised Process and Procedures manual.

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

Although Developmental Services has included statements in its policies and procedures manual that mention the retention schedule, it has yet to formalize a retention schedule.

6-Month Agency Response

The Department continues to explore IT solutions which will meet this need, along with overall program administration and billing functions within current resources. Document scanning and retention has been an area of focus for program staff.

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

60-Day Agency Response

60-Day Report Response: The Department is continuing its assessment of the document retention policies and currently is exploring IT solutions that will meet program's ongoing needs for document retention. Additionally, the Department is reviewing its formal policy for document retention requirements relating to program needs and will define those requirements in the updated program manual.

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

Recommendation #11 To: Developmental Services, Department of

To improve management oversight of the Parental Fee Program, Developmental Services should establish performance measures related to the timeliness of placement identification, information sharing with parents, a review of financial information and determination of fees, the billing of subsequent fees, and the completion of the appeals process when applicable.

1-Year Agency Response

Program staff now produces monthly statistical reports which are used to track and monitor various program administrative processes to ensure timely processing of program fee assessment and appeals processes. These statistics are reviewed monthly by the Program Manager and trends are shared with Department Management as needed. The Department is now directing resources to development of renewed practices and requirements necessary for implementation of AB 564 on July 1, 2016.

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

Developmental Services provided evidence indicating that it now tracks and monitors the timeliness of a variety of program administrative processes, including the ones specifically listed in our recommendation.

6-Month Agency Response

Program staff has completed a draft of monthly program activity reports that will be delivered to the Section Chief, Branch Manager and Deputy Director for review. This reporting function will include data and statistics on relevant program activity to include account identification, rating, redetermination, appeals, regional center compliance, and other issues impacting the program's compliance with CSA recommendation and legal requirements. This reporting mechanism will also contain measurable statistical information for ongoing monitoring of program performance. Also, the Department is hiring a retired annuitant, with broad administrative and program experience, to assist in establishing performance measures to improve management oversight of the Parental Fee Program.

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

60-Day Agency Response

60-Day Report Response: The Department has begun to define program measures in critical areas and will define requirements as they relate to review financial information, determination and billing of fees and the program's appeal process in the program manual.

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

Recommendation #12 To: Developmental Services, Department of

To improve accuracy and identify areas for initial and ongoing staff training, Developmental Services should increase management oversight of the initial fee assessment and redetermination processes to include a review of assessment worksheets for accuracy, proper support, and timeliness.

1-Year Agency Response

Program Manager continues review and approval of all fee assessments, home leave credit requests, and appeals. This review and approval process is contained in the revised program manual available to staff.

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

We have reviewed the revisions to the policies and procedures manual and agree that it adequately implements our recommendation.

6-Month Agency Response

CFS Program Manager continues to review and approve all fee assessments, home leave credit requests, and appeals. The draft version of the revised program manual contains requirements for this level and review, which has already been implemented and is expected to be ongoing.

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

Although Developmental Services has marked this recommendation as Fully Implemented its program manual outlining management oversight is still in draft form. Therefore, we have assessed this recommendation as partially implemented.

60-Day Agency Response

60-Day Report Response: The CFS Program Manager now reviews and approves all program fee assessments, as well as performs regular reviews of all documents used by staff in the preparation and analysis used during fee assessment. As the program manual procedures are updated, the CFS Program Manager will provide focused training and oversight as needed to ensure all assessment documents are accurate, adequately documented, and timely.

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

All Recommendations in 2014-118

Agency responses received are posted verbatim.