Report 2010-122 Recommendation 7 Responses

Report 2010-122: California Department of Transportation: Its Capital Outlay Support Program Should Strengthen Budgeting Practices, Refine Its Performance Measures, and Improve Internal Controls (Release Date: April 2011)

Recommendation #7 To: Transportation, Department of

To better address costs associated with the support program, Caltrans should commission an independent study of the costs and benefits of using consultants to address temporary increases in workload and, if the study reveals cost savings, use consultants. To the extent possible, Caltrans should also use temporary staff appointments for temporary increases in workload when consultants are unavailable.

Agency Response*

As mentioned previously, two reports were prepared by CTC and Associates LLC (dated July 15, 2011, and October 28, 2011, respectively), which compared the use of in-house staff and consultants. In general, these reports concluded that cost should not be the overriding factor in deciding whether to outsource. Other factors such as expediting project delivery and managing workload should be taken into consideration when determining when and what work to outsource. Caltrans subsequently contracted an additional study to identify options or tools to improve decision-making processes regarding resource mix during workload peaks and valleys. Available resources (State staff, consultants, temporary help, overtime, students, retired annuitants, etc.) were identified along with recommendations on the best utilization of each of these resources. This final report was completed in May 2013, and was emailed to John Lewis.

  • Response Type†: Annual Follow Up
  • Completion Date: May 2013
  • Response Date: October 2013

California State Auditor's Assessment of Status: Fully Implemented

Since our audit was released, Caltrans has commissioned several studies on the use of contractors. The first report concluded that recent studies on contracting support both cases—some that in-house staff were more cost-effective and others that consulting were more cost-effective. That report concluded that costs are not the overriding factor in the decision to outsource. The second report followed up on specific items identified in the first and did not modify the conclusions. A third report examined the use of contracting to balance workload and resources in several states. It noted that the states surveyed use contractors in a variety of capacities and that California uses in-house staff more than other states. The report also reiterated the point we discussed in our audit that California's Legislature has historically established a 10 percent to 90 percent, consultant-to-state staff ratio in Caltrans' budget. Finally, the report noted that the four states it surveyed, in addition to California, made limited use of temporary staff such as limited term staff, retirees, or students.

Agency Response*

As reported in the one-year response, Caltrans Division of Research and Innovation contracted for an independent study to identify options or tools to improve decision-making processes regarding resource mix during workload peaks and valleys. This final report is expected to be completed by March 2013, at which time this recommendation will be fully implemented.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: March 2013
  • Response Date: October 2012

California State Auditor's Assessment of Status: Not Fully Implemented

All Recommendations in 2010-122

†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.

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