Report 2010-103R Summary - July 2010

Department of Public Health:

It Faces Significant Fiscal Challenges and Lacks Transparency in Its Administration of the Every Woman Counts Program

HIGHLIGHTS

Our review of the Department of Public Health's (Public Health) administration of the Every Woman Counts (EWC) program, revealed the following:

  • Funding the EWC program will likely be more difficult in the future due to:
    • Declines in tobacco tax revenue.
    • Fiscal pressures placed on the State's budget resulting from the economic recession.
  • As a result of the budget problems, Public Health:
    • Asked for a budget augmentation of $13.8 million in June 2009.
    • Imposed more stringent eligibility requirements and froze new enrollment for six months beginning in January 2010.
  • Contrary to its previous claims, Public Health has a great deal of flexibility to use existing EWC program funds to provide screening services to women.
  • Public Health's ability to redirect funds is hampered because it cannot easily identify funds it uses for activities that do not directly support women.
  • Public Health does not provide the Legislature with estimates of the number of women it expects to serve in a fiscal year, even though it provides this information to the federal government to secure federal funds.
  • Public Health has not fully complied with certain aspects of state law. Specifically, it has not:
    • Developed regulations that implement the EWC program—nearly 16 years after the program began.
    • Evaluated the effectiveness of the EWC program in annual reports to the Legislature—since 1994, only one report was submitted.

RESULTS IN BRIEF

The Every Woman Counts (EWC) program is administered by the Department of Public Health (Public Health). Spending nearly $52.1 million in fiscal year 2008-09, the EWC program provides funding for breast and cervical cancer screening services for low-income women. During fiscal year 2008-09, Public Health provided EWC services to nearly 350,000 women.

Under the EWC program, medical providers submit claims to the State for the screening services they provide to women enrolled in the program. Although the EWC program provides health-related services to low-income women, the establishing laws did not structure it as an entitlement program. The number of breast and cervical cancer screenings provided—and by extension the number of women served by the EWC program—is inherently limited each year by the level of spending authorized by the Legislature.

The EWC program is funded both by state funds—tobacco tax revenue—and by a federal grant provided by the Centers for Disease Control and Prevention (CDC). However, declines in proceeds from tobacco taxes, along with the fiscal pressures placed on the State's budget resulting from the economic recession, will likely make funding the EWC program more difficult for the Legislature in the future. In June 2009 Public Health informed the Legislature that it would require a $13.8 million budget augmentation to pay for actual and projected claims during fiscal years 2008-09 and 2009-10. Public Health also took steps to reduce the number of women eligible for the EWC program by imposing more stringent eligibility standards and freezing new enrollment for six months beginning in January 2010.

Although Public Health's EWC program has faced declining revenues and increased costs in recent years, state law only requires Public Health to provide breast cancer screening at the level of funding appropriated by the Legislature. According to an official at Public Health, given the high profile of the EWC program, its political sensitivity, and the potential for public outcry, there has been a reluctance to limit services to women in the past. However, such an approach can cause Public Health to spend through its available funding before the fiscal year concludes if more women than expected access screening services. This can result in the need for Public Health to seek additional funding, as it did in June 2009.

Our audit found that Public Health could do more to maximize the funding available to pay for screening services. When requesting additional funding from the Legislature in June 2009, Public Health claimed that redirecting funds within the EWC program from other areas—such as efforts aimed at providing outreach to women and training for medical providers—to pay for additional screening services would not be possible given federal requirements and would jeopardize federal funding. Our analysis found, however, that Public Health's claim was incorrect. During fiscal year 2008-09, federal requirements mandated that Public Health spend $1.9 million in state funds as a match to federal funding, and it did. In addition, Public Health was required to spend another $12.4 million in state funds on any aspect of the EWC program, including screening women for breast and cervical cancer. The CDC leaves the decisions regarding how to allocate these additional funds to Public Health. As a result, it appears that Public Health has a great deal of flexibility to use existing EWC program funds for what we consider the core mission of the program—providing screening services to women. We estimate that had Public Health redirected one-half of the amount it spent on various contracts for nonclinical activities in fiscal year 2008-09, it could have dedicated about $3.4 million to pay for screening activities. This funding would have allowed more than 27,500 additional women to obtain services from EWC.

However, Public Health's ability to identify and redirect funds toward activities that directly support women is hampered by the fact that Public Health cannot determine how much its contractors spend on other activities. For example, Public Health spent more than $6.7 million on various contracts with local governments and nonprofit organizations during fiscal year 2008-09; however, it does not know how much these contractors spent on each contracted activity. Instead, Public Health knows only the total amount payable under each contract and how much has been billed for general categories such as personnel costs and overhead to date. Without knowing how much contractors are spending on specific services that support the EWC program, Public Health lacks a basis to know whether the funds paid for these activities would have been better spent on additional mammograms or other screening procedures. Public Health indicated that its staff use their collective training and experiences as health care professionals to guide how they allocate funding within the EWC program. Although Public Health may feel that it can rely on its staff's professional expertise to determine how much of its funding to invest in the nonclinical aspects of the EWC program, it would be in a better position to defend these funding decisions to the Legislature and other program stakeholders if it knew how much it spends on these nonclinical costs and could demonstrate why spending in these areas is a better choice than paying for additional screenings for eligible women.

Our audit also found that Public Health develops its budget for the EWC program based on past expenditure trends and applies an assumed growth rate for these expenditures, but does not explicitly establish estimates of how many women it expects to serve in a given fiscal year. Public Health could help establish clear expectations for program outcomes by providing the Legislature with information on its expected caseload and cost, as it does with its federal grant with the CDC. The EWC program chief indicated that Public Health would like to use caseload data to be more precise in forecasting its costs, but has not done so because it lacks confidence in the reliability of the caseload data it collects. In order to provide the federally required caseload data to the CDC, Public Health has entered into a contract with the University of California, San Francisco, to assure the quality of its caseload data. The data that Public Health submits to the CDC are the number of women served based on the federal funds provided. Had Public Health done the same at the state level, it could have helped the Legislature define expectations for the program—in terms of the number of women to be served or other similar measures—during the budget process for fiscal year 2008-09. In doing so, it would have been in a stronger position to explain to the Legislature why it needed an additional $6.3 million to pay for clinical claims for that year. Specifically, Public Health would have been able to explain to the Legislature whether it had already served the agreed-upon number of women based on the funding provided.

Finally, our audit found that Public Health could do more to improve the public transparency and accountability with which it administers the EWC program. State law requires Public Health to develop regulations that implement the EWC program. Nearly 16 years after the program began, such regulations still have not been developed. Public Health cited staff and funding limitations as the cause for the delay. Nevertheless, had Public Health developed the required regulations, it would have provided the public with an opportunity to comment and to provide input on important aspects of the EWC program, such as eligibility requirements and service priorities should funding be exhausted. State law also requires Public Health to evaluate the effectiveness of the EWC program annually and submit a report on its findings to the Legislature. Specifically, the report is required to contain information such as the number of women served and their race, ethnicity, and geographic area, as well as information on the number of women in whom cancer was detected through the screening services provided and the stage at which it was detected. Since this reporting requirement was placed in state law in 1994, the Legislature has received only one report—in August 1996—in response to this requirement. This lack of information on the effectiveness of the EWC program limits Public Health's ability to advocate for appropriate funding and hampers the Legislature's and the public's ability to exercise oversight.

RECOMMENDATIONS

To ensure that Public Health maximizes its use of available funding for breast cancer screening services, it should evaluate each of the EWC program's existing contracts to determine whether the funds spent on nonclinical activities are a better use of taxpayer money than paying for women's breast or cervical cancer screenings. To the extent that Public Health continues to fund its various contracts, it should establish clearer expectations with its contractors concerning how much money is to be spent directly on the different aspects of the EWC program and should monitor spending to confirm that these expectations are being met.

To ensure that Public Health can maintain fiscal control over the EWC program, we recommend that it take the following steps:

  • Develop budgets for the EWC program that clearly communicate to the Legislature the level of service that it can provide based on available resources. One way Public Health could do this would be to estimate the number of women that can be screened at given levels of funding.
  • Seek legislation or other guidance from the Legislature to define what actions the program may take to ensure that spending stays within amounts appropriated for a fiscal year.

To ensure better public transparency and accountability for how the EWC program is administered, Public Health should do the following:

  • Comply with state law to develop regulations, based on input from the public and interested parties, that will direct how Public Health administers the EWC program. At a minimum, such regulations should define the eligibility criteria for women seeking access to screening services.
  • Provide the Legislature and the public with a time frame indicating when Public Health will issue its annual report on the effectiveness of the EWC program. Further, Public Health should inform the Legislature and the public of the steps it is taking to continue to comply with the annual reporting requirement in the future.

AGENCY COMMENTS

Public Health generally agreed with our recommendations. However, it disagrees with our conclusion that the EWC program would be able to serve more women and still meet the federal grant requirements if it redirected some of the funds it spends on various contracts for nonclinical activities.


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