2006 Legislative Audits
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1. Summary of Report 2006-01 :
A Review of SITLA's Administrative Compensation and
A Performance Audit of the School & Institutional Trust Land Administration (SITLA)
Since separation from state controls, some of SITLA's general methods of operations have raised concerns. Primarily, the focus is on maximizing fund growth rather than distributing revenues to education. Contributing to concerns has been SITLA's development emphasis, with questionable policies and profitability, and SITLA's salary and bonus program, which is higher than similar trust land agencies in other Western states. SITLA's bonus program, which is tied to fund growth, has provided senior management with yearly bonuses averaging $20,000 to $40,000 per year.
Full Report - A Review of SITLA's Administrative Compensation
2. Summary of Report 2006-02 : A Performance Audit of Utah's Jail Reimbursement Program
The jail reimbursement program reimburses county jails 70 percent of their direct costs for housing inmates meeting certain criteria. While county jail reimbursement billing errors exist, the errors do not appear to be intentional and can be reduced improving controls over county billing processes. In addition, many outstanding policy questions exist concerning the jail reimbursement program that has lead to inconsistent policy application by the Utah Department of Corrections. Also, the Legislature may want to review the jail reimbursement funding policy as this policy determines the cost of the jail reimbursement program.
Full Report - A Performance Audit of Utah's Jail Reimbursement Program
3. Summary of Report 2006-03 : A Performance Audit of Redevelopment Agency Practices
In our opinion, the blight criteria outlined in the Utah Code needs strengthening. The current wording of Utah's Redevelopment Agencies Act continues to allow almost any property to be deemed blighted. Consequently, this allows for the use of tax increment for undeveloped lands that can alter the competitiveness of different properties within the state by providing incentives to developers. This can undermine the effectiveness of the statute when used in valid cases of blight. In addition, we believe redevelopment practices can be improved by statutory clarifications and better redevelopment agency oversight. In particular, the Legislature should clarify whether the elimination of blight is the primary reason for the creation of redevelopment projects.
Full Report - A Performance Audit of Redevelopment Agency Practices
4. Summary of Report 2006-04 : Archaeological Surveys in Utah
Concerns have been raised that the Division of State History has gone beyond its statutory role of offering advice to state agencies regarding the protection of Utah's cultural resources. Instead, some believe the agency has taken on a regulatory role. In fact, some archaeologists feel if they do not follow the guidance given by the Division of State History they could be at risk of losing their archaeology permits. Most concerns about the division were addressed through the passage of House Bill 139 passed during the 2006 Legislative Session.
Digest of the Report - Archaeological Surveys in Utah
Full Report - Archaeological Surveys in Utah
5. Summary of Report 2006-05 : Limited Survey of Local Government Compliance with Impact Fees Act
Based on our limited survey work, we developed concerns about the manner in which political subdivisions:(1) Justify the determination of impact fees and exactions, (2) Account for impact fee revenues and expenditures, and (3) Charge other fees associated with development and provide appropriate administrative remedies for dispute of fees. Despite these concerns, we recommend the Audit Subcommittee remove the Performance Audit of Local Government Compliance with Impact Fees Act from the prioritized list of audits. Due to the passage of Senate Bills 267 and 268 during the 2006 Legislative General Session, many of our concerns were addressed. Both of the audit requestors concur with this action.
6. Summary of Report 2006-06 : A Performance Audit of the Utah Occupational Safety & Health Division (UOSH)
Utah's Occupational Safety and Health Division (UOSH) provides safety and health assistance to Utah employees and employers. This audit focused on the Compliance process. Specific audit objectives included evaluating the effectiveness and consistency of UOSH's enforcement of safety and health standards, assessing the effectiveness and efficiency of internal staff management practices including new staff training and inspector productivity, and reviewing federal grant management practices. We found several weaknesses in these areas and the audit addresses several recommendations to help UOSH improve their practices.
7. Summary of Report 2006-07 : Southeast Utah Small Business Investment Fund Provides Some Economic Benefits
The Southeast Utah Small Business Investment Fund (SEUSBIF) program was designed to give seed capital to low-income families wanting to start small businesses in Carbon, Emery, Grand and San Juan counties. We were asked to review SEUSBIF's economic benefit to these rural counties and review other aspects of the program. This report is designed to aid the Legislature in deciding whether to approve the requested $2 million in general funds. Regarding the program's past performance, we conclude:
1. SEUSBIF has provided some economic benefits through increased business-related spending in the local economies and through an increase in the number of jobs.
2. SEUSBIF may not have decreased participants' use of public assistance in the short-run, as originally asserted by its board members.
3. SEUSBIF administrative costs have been kept low. But, (pending legislative approval of new funding) plans to modify operations may affect administrative efficiency.
Digest of the Report - Southeast Utah Small Business Investment Fund Provides Some Economic Benefits
8. Summary of Report 2006-08 : A Performance Audit of the Endangered Species Mitigation Fund
A comparison of changes between the 1998 and the 2005 sensitive species lists provides little effectiveness information. In order to fairly assess the ESMF's performance, we believe effectiveness criteria needs to be developed within the Department of Natural Resources (the DNR). Some of this criteria will provide the Legislature with information needed to formulate appropriate mitigation expectations and make informed decisions. Nevertheless, the oversight provided by Endangered Species program staff over discretionary projects those other than the Colorado River, Virgin River, and June Sucker projects could improve.
9. Summary of Report 2006-09 : A Performance Audit of the State's Purchasing Card Program
The use of state purchase cards has significantly grown among state employees who are card holders. Purchase cards are visa credit cards issues to about 1,450 employees throughout the state. Oversight is to be provided by a state administrator, individual agency site coordinators, and cardholders' supervisors. However controls need improvement because cardholders often do not comply with card requirements. Still, purchasing cards are an efficient purchasing mechanism that saves the state money that should be encouraged with proper controls.
10. Summary of Report 2006-10 : A Review of the Use of Vending Machines in Public Schools
We estimate that Utahs' secondary schools (middle, junior, and senior high schools) earned about $3.25 to $3.75 million in vending revenues in fiscal year 2005. Total revenues and revenue per-student varied widely among schools. We believe that vending operations in schools can be improved, particularly the procedures for contracting with vendors and financial controls. Because vending revenues are discretionary funds, schools use them in a variety of ways; we observed that some expenses are not clearly student-related, but little policy exists to guide how vending revenues may be spent. For at least one of their agreements, 33 of 64 sampled schools using outside vendors have oral agreements or rely on vendor proposals instead of using written, signed contracts, and some schools did not use competitive bidding when setting up vendor agreements. School districts can increase the guidance provided to schools on how to account for and spend vending revenues while allowing local discretion in the use of these funds.
Digest of the Report - A Review of the Use of Vending Machines in Public Schools
11. Summary of Report 2006-11: A Performance Audit of Post-Retirement Re-employment
The intent of Utah's post-retirement re-employment statutes has been bypassed by select departments for select employees. This practice is not statewide but still has a cost to the retirement system; it stems from an inconsistently applied misinterpretation of statutory intent that primarily benefits a select group of professional staff. We believe that by clarifying language in the post-retirement statutes and by eliminating the 401(k) benefits currently given to re-employed retirees, the Legislature can reduce both the incidence of violations and the incentives that encourage employees to retire earlier and return to work.
Full Report - A Performance Audit of Post-Retirement Re-employment
12. Summary of Report 2006-12: A Performance Audit of the Utah Department of Corrections
Problems with favoritism and questionable management practices appear to exist at the Utah Department of Corrections. The cases we researched demonstrated that employees' concerns of favoritism appear to be justified. In addition, there are also additional concerns with management's oversight of: officers' certification, use of vehicles, and compliance with certain policies. Lastly, the internal audit and internal affairs functions are in need of greater independence.