Report 2014-110 Recommendation 5 Responses

Report 2014-110: California Department of Resources Recycling and Recovery: The Beverage Container Recycling Program Continues to Face Deficits and Requires Changes to Become Financially Sustainable (Release Date: November 2014)

Recommendation #5 To: Resources Recycling and Recovery, Department of

To ensure it effectively uses resources, CalRecycle should renegotiate its agreement with the California Department of Justice (Justice) to pay based on the cases CalRecycle refers, limiting costs to investigations over a predefined period of time. CalRecycle could agree to increase the budget for a particular investigation if Justice demonstrates that it has developed promising leads.

Agency Response*

The construct outlined in CSA's recommendation for a renegotiated interagency agreement (IA) has been deemed unfeasible by both CalRecycle and DOJ. CalRecycle believes DOJ's past efforts are more significant than what was listed in the BSA Audit Report. CalRecycle will continue to work with DOJ under the existing interagency agreement construct to develop evidence based benchmarks to better capture results of their efforts. CalRecycle will also evaluate appropriate objectives and lessons learned from its work with DOJ when developing the next IA.

  • Response Type†: Annual Follow Up
  • Response Date: October 2016

California State Auditor's Assessment of Status: Will Not Implement


Agency Response*

The construct outlined in CSA's recommendation for a renegotiated interagency agreement has been deemed unfeasible by both CalRecycle and DOJ. CalRecycle believes DOJ's past efforts are more significant than what was listed in the BSA Audit Report. CalRecycle will continue to work with DOJ under the existing interagency agreement construct to develop evidence based benchmarks to better capture results of their efforts. CalRecyle also will evlauate appropriate objectives and lessons learned from its work with DOJ when developing the next IA.

  • Response Type†: 1-Year
  • Estimated Completion Date:
  • Response Date: November 2015

California State Auditor's Assessment of Status: Will Not Implement

We stand by our recommendation. As we further describe on pages 36 through 39 of our audit report, CalRecycle pays Justice significantly more to investigate criminal activity than the financial recoveries that result from its efforts. CalRecycle provided no evidence to support its claim that Justice's past efforts are "more significant" than what was listed in our final report. Nevertheless, we are pleased that CalRecycle sees value in better demonstrating the financial return to the beverage program resulting from Justice's investigations.


Agency Response*

At the quarterly meeting on April 22, 2015, both DOJ and CalRecycle discussed development and capture of improved performance metrics to highlight both the efforts and impacts of DOJ's investigations. Additionally, on May 20-21, CalRecycle will host a two-day workshop with representatives from Department of Justice/Bureau of Investigation and the Attorney General's Office. The workshop will identify issues and opportunities for enhancing our collective ability and authority to effectively combat beverage container program fraud associated primarily with the importation and subsequent illegal CRV redemption of out-of-state beverage containers.

  • Response Type†: 6-Month
  • Estimated Completion Date: 06/302017
  • Response Date: May 2015

California State Auditor's Assessment of Status: Pending


Agency Response*

CalRecycle & DOJ will continue our efforts to collaborate and pursue collective success under the terms, conditions and funding mechanisms in the current interagency agreement. CalRecycle will revisit this CSA Audit recommendation for potential implementation at the end of the term of the current interagency agreement which is currently June 30, 2017.

  • Response Type†: 60-Day
  • Estimated Completion Date: June 30, 2017
  • Response Date: December 2014

California State Auditor's Assessment of Status: Pending

We stand by our recommendation. As we further describe on pages 36 through 39 of our audit report, CalRecycle pays Justice significantly more to investigate criminal activity than the financial recoveries that result from its efforts.


All Recommendations in 2014-110

†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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