JLAC Questions Management Practices of Departments that Could Have Saved $1.4 Billion

The Joint Legislative Audit Committee, chaired by Assemblymember Alyson Huber, held an oversight hearing today on potential budget savings by implementing the State Auditor’s recommendations as detailed in a report issued in February (2010-406).

The State Auditor reports that if the recommendations in the report had been fully implemented it is estimated that the state could have saved more than $1.4 billion by reducing costs and avoiding wasteful spending. Many of the achievable savings identified are a result of audits passed by the Joint Legislative Audit Committee. "Given our ongoing and unprecedented budget deficit, it is vital that we strengthen our oversight responsibilities and eliminate wasteful spending. We must shed light on poor management practices of state departments particularly when management decisions result in higher costs for the taxpayers," said Assemblymember Huber. "Today’s hearing revealed how we could save $1.4 billion just by adopting better management practices."

State Auditor Elaine Howle provided an overview of the report and recommendations to the committee. The committee then heard from representatives from the Department of Social Services, Department of Health Care Services and Department of Corrections and Rehabilitation.

The committee heard a number of examples of how better management practices could lead to significant potential budget savings. For example, the Department of Health Care Services (DCHS) is frequently overcharged by providers of durable medical equipment despite being notified of changes in billing requirements. DHCS could potentially save $13 million from instituting effective practices to monitor and enforce its medical equipment reimbursement rates.

The Department of Corrections and Rehabilitation (CDCR) had the recommendation with the largest cost savings connected with it. CDCR currently pays large overtime costs to cover for unmet correctional officer needs and savings from vacant budgeted positions are insufficient to finance shortfalls in the overall funding for correctional officers and overtime. If this issue was addressed it could result in a budget savings of $58 million.

A copy of the Auditor’s report can be found at www.bsa.ca.gov

Excerpted from www.ranchocordovapost.com