Report 2010-101 Recommendations and Responses in 2012-041

Report 2010-101: Department of Resources Recycling and Recovery: Deficiencies in Forecasting and Ineffective Management Have Hindered the Beverage Container Recycling Program

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of Most Recent Response
Department of Resources Recycling and Recovery 2 18 5 4

Recommendation To: Resources Recycling and Recovery, Department of

The department should continue with its efforts to implement regulation changes that will require beverage distributors to register with the department and to notify the department if another entity has agreed to report and make payments on behalf of that beverage distributor.

Response

The Department proposed changes to the California Code of Regulations (Title 14, Division 2, Chapter 5) which were approved by the Office of Administrative Law effective on September 1, 2012. Section 2230 has been amended and Sections 2231, 2300 and 2301 have been added to require beverage manufacturers and distributors to register with the Department and for distributors to report pay on behalf agreements with other entities.

  • California State Auditor's Assessment of Status: Fully Implemented
  • Completion Date: September 2012
  • Response Date: September 2012

Recommendation To: Resources Recycling and Recovery, Department of

To improve management of its fraud investigations, the department should take the following actions: Formalize the approach used to analyze recycling data for potential fraud and develop criteria for staff to use when deciding whether to refer anomalies for investigation. Because DORIIS will be a central data source for recycling activities once it is implemented, the department should continue with its plan to automate the review of recycling data within DORIIS to identify potential fraud.

Response

CalRecycle, Division of Recycling, Recycling Program Enforcement Branch (RPEB) currently produces, on a daily basis, a rules based Fraud Detection Report (FDR) for anomaly detection of disbursement transaction data. This report is automatically generated by the Division of Recycling Integrated Information System (DORiis). This report detects known indicators/ patterns of fraud using the primary reporting form recyclers used to report purchases and movement of CRV beverage containers. RPEB management uses the report to effectively assign investigative and inspection resources to potential high-value fraud targets identified on the FDR. The FDR identifies anomalous and/or suspect transactions before they are invoiced for CRV payment reimbursement. This provides RPEB the opportunity to place suspect transactions on hold, as needed, until the supporting documentation can be reviewed for accuracy and completeness by RPEB field investigators. The FDR generated from DORiis provides CalRecycle with the ability to mitigate CBCRF losses associated with fraudulent transactions on a pre-payment basis. CalRecycle has applied the above tools and processes and will document this in a policy and procedures manual that is expected to be complete in December, 2012.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: December 2012
  • Response Date: September 2012

Recommendation To: Resources Recycling and Recovery, Department of

To improve oversight of grants and ensure that the intended value is received from the grant funds it awards, the department should do the following: For recipients of market development grants that are unable to meet the goals of their grants, maintain contact with grantees after the project is completed to determine if the goals may ultimately be achieved.

Response

ABX8 7 allows the Market Development Expansion grant program to sunset on January 1, 2012. The current grants are governed by the Grant Management Procedures Manual, Section X, Project Management and Administration, Section G. Final Report and Section H. Close Out, that require CalRecycle grant managers and supervisors maintain contact with all grantees until the files are closed, both those that are on track and those that are unable to fulfill the goals of their grant. The grant files cannot be closed without explanation and final payment adjustment for any goals not met, which will not be possible until the grant agreements expire at the end of FY 2013/2014. After the grant files are closed as approved by Branch Management, CalRecycle will continue to contact grantees to assess whether the goals of the projects were ultimately achieved.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: June 2015
  • Response Date: September 2012

Recommendation To: Resources Recycling and Recovery, Department of

The department should weave benchmarks, coupled with metrics to measure the quality of its activities, into the strategic plan for the beverage program to allow it to better measure progress in meeting goals.

Response

The BSA recommendation is that Department of Resources Recycling and Recovery (CalRecycle) integrate benchmarks and metrics designed to measure the quality of the program's activities into the strategic plan to better measure the progress in meeting the program's goals.

CalRecycle is currently engaged in two stakeholder processes that will significantly influence its future operations. Pursuant to Chapter 452 (AB341, Statutes of 2011), CalRecycle is required to provide a report to the Legislature by January 1, 2014, that provides strategies to achieve a 75% waste diversion policy goal that also includes other specified information. In addition, a structural funding deficit of almost $100M in the Beverage Container Recycling Fund requires that CalRecycle work with stakeholders on a sustainable remedy that involves what could be significant program reforms. The implication of both of these efforts to a comprehensive, detailed and relevant strategic plan is significant. CalRecycle anticipates that the stakeholder processes will result in more specific proposals in the 2013 and 2014 fiscal years that will inform a formal strategic planning process that will take final form in 2014.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: 2014
  • Response Date: September 2012

Recommendation To: Resources Recycling and Recovery, Department of

The department should ensure that the strategic plan incorporates all relevant activities of the beverage program.

Response

The BSA recommendation is that Department of Resources Recycling and Recovery (CalRecycle) incorporate all relevant activities of the beverage program into the department's strategic plan.

CalRecycle is currently engaged in two stakeholder processes that will significantly influence its future operations. Pursuant to Chapter 452 (AB341, Statutes of 2011), CalRecycle is required to provide a report to the Legislature by January 1, 2014, that provides strategies to achieve a 75% waste diversion policy goal that also includes other specified information. In addition, a structural funding deficit of almost $100M in the Beverage Container Recycling Fund requires that CalRecycle work with stakeholders on a sustainable remedy that involves what could be significant program reforms. The implication of both of these efforts to a comprehensive, detailed and relevant strategic plan is significant. CalRecycle anticipates that the stakeholder processes will result in more specific proposals in the 2013 and 2014 fiscal years that will inform a formal strategic planning process that will take final form in 2014.

  • California State Auditor's Assessment of Status: Not Fully Implemented
  • Completion Date: 2014
  • Response Date: September 2012

Current Status of Recommendations

All Recommendations in 2012-041