Analyst’s Office Cites ‘Shortcomings’ in Mental Health Hospitals’ Administration

The Legislative Analyst’s Office found a number of budgeting inefficiencies and question marks about policies and procedures in its evaluation of the Department of State Hospitals released Monday.

DSH oversees California’s five mental hospitals with an annual budget of $1.6 billion. The LAO analysis said it could spend that money in more efficient ways.

LAO officials said the Legislature should get justification and additional information from DSH officials for its budget requests.

“For the near term, this budget year, the important step is to provide additional information to the Legislature,” said Sarah Larson, a fiscal and policy analyst at LAO. “They requested additional capacity, for instance, and it will be important to provide more information so the Legislature knows just how the department is using its resources.”

In particular, the report cited:

  • A large amount of funded beds in the hospitals that are not used;
  • Unclear staffing needs to operate the facilities;
  • Inefficient budgeting methodology, with poor incentives for efficiency; and
  • The department is behind other state agencies in terms of having a transparent, updated and efficient budget process.

DSH has a new director — Pam Ahlin, who previously was DSH’s chief deputy director and formerly headed Coalinga State Hospital.  She was appointed to the director’s post by Gov. Jerry Brown (D) on Dec. 31, 2014.

Ahlin and officials from DSH declined to comment on the LAO report.

“Thanks for your questions to the Department of State Hospitals,” said Ralph Montaño, information officer at the Office of Communications for DSH in an email. “The Department received a copy of the report this morning. We will be reviewing it and providing comments to the LAO.”

To correct the problems at DSH, LAO suggested in the report that the Legislature step in. It should make the department set up a new system to make budgeting “more accurate and adequate,” the report said.

Also, because the number of patients and the severity of those patients’ conditions can fluctuate, LAO said the department should “develop its budget and staffing requests based on expected changes in the number and acuity (or level of care) of its patient population, as well as make adjustments to its budget if the actual population differs from its projections.”

“The current process doesn’t account for a lot of transparency or oversight at the Legislature level,” Larson said. “Providing the additional information we’ve recommended so the Legislature can better understand the use of their funds, that would be a key goal.”

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