State agencies have not properly overseen how California counties are spending billions of dollars on mental health care programs generated by Proposition 63, according to a state audit released Thursday.
The 2004 ballot initiative, written by Senate President Pro Tem Darrell Steinberg, created the Mental Health Services Act. It levies a 1 percent tax on people who make more than $1 million, to be spent by counties on mental health services. It also created an oversight commission to monitor the funds.
But that commission and associated state agencies have not adequately monitored the county programs that receive Proposition 63 funds, says the review by state auditor Elaine Howle.
"Because of the minimal oversight (the Department of) Mental Health and the Accountability Commission provided in the past, the State has little current assurance that the funds directed to counties - almost $7.4 billion from fiscal years 2006-07 through 2011-12 - have been used effectively and appropriately," Howle wrote in a letter accompanying her audit.
The programs have been dogged by complaints for years. Media reports have cited spending on yoga, gardening and public relations efforts, and critics have complained that the overall effort doesn't address the needs of many of the most seriously mentally ill. The state audit does not address those complaints, instead focusing on the dynamic between the state and county governments.
The review found that state officials did not conduct program evaluations or on-site reviews of county mental health programs, did not consistently ensure that counties reported required data about whom they were serving and only recently established a framework for evaluating programs several years after voters approved the initiative.
Steinberg, a Sacramento Democrat who has made mental health care a major focus of his political career, said he welcomed the audit and hoped it would compel better reporting by the programs Proposition 63 funds. He was among the lawmakers who requested the audit last year after news reports questioned whether county programs were appropriately spending the money.
"This is a wake-up call to the folks in charge," Steinberg said. "You can't just do the work, you can't just help the people. That's most important, but you have to tell the public why and how people are better because of this investment of public dollars."
The audit recommends that the state Department of Health Care Services improve the contracts it has with each county to ensure more oversight, conduct on-site reviews and do a better job collecting data from counties.
It also recommends that the Legislature write a measure allowing the state to withhold Proposition 63 funds from counties that don't comply with reporting requirements. Steinberg was noncommittal on whether he would carry such legislation but said he takes all the recommendations seriously.
DJ Jaffe, a mental health advocate in New York who has criticized Steinberg's mental health initiative, said Howle's audit tells half the story.
"She did a good job of identifying the total lack of oversight and did a poor job of identifying the consequences of that," Jaffe said. "The lack of oversight has consequences in terms of increased hospitalization, increased suicides and increased incarceration."
The California Mental Health Directors Association disputed that claim. "At the local level, counties have monitored and are proud of the difference our programs are making in individuals' and families' lives. Counties have achieved significant reductions in our client levels of homelessness, hospitalization, and incarceration, using Prop. 63 funds," said a joint statement from the association's president, Jerry Wengerd, and Executive Director Patricia Ryan.
"We agree with the Auditor that state oversight agencies must develop an effective and standardized evaluation method so that we can tell these county-by-county stories on a statewide basis."
The audit focused on four counties: Sacramento, Los Angeles, Santa Clara and San Bernardino. It made no recommendations for changes to how Los Angeles runs it programs but suggested that the other three counties amend their contracts with the state by the end of the year to include specific goals.
Sacramento "consistently collected, analyzed and often reported on data" in connection with three programs it reviewed, but did not always do so for its prevention programs, the audit said, in some cases failing to "collect data that its contracts required providers to submit."
Sacramento, San Bernardino and Santa Clara counties, as well as the state agencies targeted in the audit, agreed with the auditor's recommendations to step up reporting and oversight.
Rose King, a political consultant who worked with Steinberg in crafting Proposition 63 but has criticized the program in recent years, praised the audit for focusing on the core problem.
"It's been a long time with no accountability," she said. "We have no idea whether these counties and their contractors are providing the services they claim to be providing. The state has no idea what the counties are doing."
Call Laurel Rosenhall, Bee Capitol Bureau, (916) 321-1083. Follow her on Twitter @laurelrosenhall.