In February 2006, the federal court in the Plata v. Schwarzenegger case pertaining to inmate medical care appointed a Receiver to take over the direct management and operation of the state’s prison medical health care delivery system from the California Department of Corrections and Rehabilitation (CDCR). In this brief, we (1) provide a status report on the Receiver’s actions, (2) present an overview of state spending on inmate medical care, (3) analyze the various requests contained in the Governor’s budget for the Receiver, and (4) identify issues and recommendations for legislative consideration. Specifically, we recommend that the Legislature: require the administration to present at budget hearings a detailed plan on how its proposed $811 million in savings will be achieved; withhold action on staffing requests pending the submission and our review of the above plan; and, fund only the most critical IT projects in the budget year and delay funding for the less critical projects.