Report 2012-042 Recommendation 1 Responses

Report 2012-042: Children's Hospital Program: Fund Disbursements Are Appropriate, but Estimates of Cash Needs Have Been Consistently High (Release Date: July 2012)

Recommendation #1 To: Health Facilities Financing Authority, California

To avoid contributing to the State's financial strain, the authority should limit future bond sales to the level of disbursements it reasonably expects to make during the following six-month period.

Agency Response*

Commercial paper (CP) is now issued instead of upfront general obligation (GO) bond funds. This process allows CHFFA to limit CP sales to the level it reasonably expects to make in two months, exceeding the auditor's recommendation.

Bond funds are later issued to cover actual costs.

The first CP ($10.5 million) was issued at the end of June, 2013.

  • Response Type†: 1-Year
  • Completion Date: September 2012
  • Response Date: July 2013

California State Auditor's Assessment of Status: Fully Implemented


Agency Response*

Since the Authority's 60 day response, the Authority has not requested any additional bond funds and has continued efforts to reduce its existing cash balance by continuing to make disbursements from its existing cash balance. The Authority agrees to limit future bond sales to the level of disbursements it reasonably expects to make during the following six-month period following the sale, or as otherwise directed by the Department of Finance in its twice-yearly cash needs survey.

  • Response Type†: 6-Month
  • Response Date: January 2013

California State Auditor's Assessment of Status: Pending

The California Health Facilities Financing Authority has not provided documentation to support its assessment. As such, we cannot yet assess the authority's implementation of this recommendation.


Agency Response*

The authority indicates it has not requested additional bond funds. (See 2013-406, p. 89)

  • Response Type†: 60-Day
  • Response Date: September 2012

California State Auditor's Assessment of Status: Pending


All Recommendations in 2012-042

†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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