July 21, 2015 2015-501
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
Sacramento, California 95814
Dear Governor and Legislative Leaders:
This report presents the results of a follow-up audit of the California Department of Developmental Services (Developmental Services) related to certain recommendations made in 2010 by the California State Auditor (state auditor). In August 2010 the state auditor issued a report titled Department of Developmental Services: A More Uniform and Transparent Procurement and Rate-Setting Process Would Improve the Cost-Effectiveness of Regional Centers Report (2009-118). At the time, we recommended that Developmental Services require regional centers—nonprofit entities the department contracts with to coordinate services for Californians with developmental disabilities (consumers)—to document the basis of their vendor selection and specify which comparable vendors were evaluated to ensure that they chose the least costly vendor as state law requires. In addition, we recommended that Developmental Services review a sample of this documentation as part of its biennial fiscal audits of the State’s regional centers. Developmental Services has declined to implement these recommendations stating it believes that it does not have the authority to do so, a contention with which we continue to disagree.
This report concludes that Developmental Services continues to miss an opportunity for ensuring regional centers comply with one of the Legislature’s cost-containment measures under state law. Our review of a sample of consumer files found that all five regional centers we visited lacked practices that would allow Developmental Services or other independent observers to verify that the least costly provider of comparable services was being selected, and if not, why. As we originally noted in our 2010 audit, absent such documentation, Developmental Services cannot ensure planning teams select the least costly vendor when appropriate. Consequently, given Developmental Services’ continued decision that it will not implement our recommendations, we believe it would be prudent for the Legislature to amend state law and direct regional centers to document the vendor cost analyses that the planning team performs when creating a consumer’s Individual Program Plan. Further, the Legislature should require that Developmental Services verify that such steps are actually performed in practice.
ELAINE M. HOWLE, CPA