Report 2013-122 Recommendation 5 Responses

Report 2013-122: California Department of Toxic Substances Control: Its Lack of Diligence in Cost Recovery Has Contributed to Millions in Unbilled and Uncollected Costs (Release Date: August 2014)

Recommendation #5 To: Toxic Substances Control, Department of

To ensure that it maximizes the recovery of its costs from responsible parties, by October 2014, the department should do the following:

- Continue its plan to update policies and procedures for using liens whenever appropriate.

Annual Follow-Up Agency Response From November 2015

Audit Report 2013-122 recommended that the Department of Toxic Substances Control (DTSC) should continue its plan to update policies and procedures for using liens whenever appropriate. On November 6, 2015, DTSC issued its Statutory Lien Policy and Procedures (DTSC-15-001), outlining DTSC's use of statutory liens pursuant to Health and Safety Code section 25365.6 to secure unreimbursed response costs incurred by DTSC in conducting or overseeing response actions pursuant to the Hazardous Substances Account Act (HSAA), Health and Safety Code section 25300 et seq. DTSC worked with the Attorney General's Office to finalize DTSC's Lien Policy and Procedure to ensure that it: (1) complies with the constitutional due process principles articulated in December 2014 by the Third District Court of Appeal in Van Horn v. State of Cal. Dept. of Toxic Substances Control, Case No. C073173; and (2) provides sufficient guidance to DTSC staff regarding the appropriate use of statutory liens to secure response costs incurred by the Department.

Note: Statutory Lien Policy and Procedures (DTSC-15-001) sent as attachment via e-mail to State Auditor.

  • Completion Date: November 2015

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


1-Year Agency Response

DTSC is working with the Attorney General's Office to finalize the draft statutory lien policy to ensure that it: (1) complies with the constitutional due process principles articulated in December 2014 by the Third District Court of Appeal in Van Horn v. State of Cal. Dept. of Toxic Substances Control, Case No. C073173; and (2) provides sufficient guidance to DTSC staff regarding the appropriate use of statutory liens to secure response costs incurred by the Department. The draft is undergoing successive review by DTSC staff and the Attorney General's Office. The most recent round of revisions was received on August 7, 2015. DTSC anticipates the policy will be completed by the end of September 2015.

  • Estimated Completion Date: 9/30/15
  • Response Date: August 2015

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


6-Month Agency Response

DTSC continues to research issues related to both administrative and judgment liens and develop a revised lien policy and procedures to address both administrative and judgment liens. On December 19, 2014, the Third District Court of Appeal published its opinion in Van Horn v. State of Cal. Dept. of Toxic Substances Control, Case No. C073173, raising concerns regarding whether DTSC's lien hearing procedures comply with constitutional due process principles. DTSC is currently evaluating its lien process in the context of the Third District Court of Appeal's opinion and continues to develop revised lien policy and procedures.

  • Estimated Completion Date: 8/7/2015
  • Response Date: February 2015

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


60-Day Agency Response

DTSC continues to research issues related to both administrative and judgment liens and has begun the process of developing a revised lien policy and revised lien DPM to address best practices with respect to both administrative and judgment liens. Once draft documents are developed, a process will be created to allow OLC, Program, and DTSC management to review and comment on the revised policy and procedure.

  • Completion Date: October 2014
  • Response Date: October 2014

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

Although the department indicates it is continuing to research the issues and has begun to develop a revised lien policy and procedures, these documents are not yet complete and we have not been able to review them. We will wait until we receive the final versions before we agree that the recommendation has been fully implemented.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

All Recommendations in 2013-122

Agency responses received are posted verbatim.


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