2015 Legislative Audits
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1. Summary of Report 2015-01: A Performance Audit of Projections of Utah’s Water Needs
We were asked to evaluate the accuracy of the state’s projected demand and supply of water and to investigate options for extending Utah’s currently developed water supply. We found that the Division of Water Resources does not have a reliable source of local water use data on which to base its projections. For this reason, we question the reliability of the division’s 2000 water use study, which was used as a baseline for projecting Utah’s future water needs. According to this study, each Utah resident will use, on average, 220 gallons per day through the year 2060. Evidence suggests this number is overstated and that per capita consumption levels will likely decline below 220 gallons per day by 2060. Policy makers can further reduce water demand by requiring metering on all service connections and by promoting pricing structures that encourage conservation. Finally, we found the division’s estimates of future water supply are understated. This is because more water will become available by converting agriculture water for municipal and industrial use than is projected.
Full Report - A Performance Audit of Projections of Utah's Water Needs
2. Summary of Report 2015-02: A Performance Audit of DWS Customer Service and Follow-up
We were asked to conduct a follow up of the Department of Workforce Services’ (DWS) responses to the 2013 audit A Performance Audit of the Workforce Services Work Environment (2013-13). In addition, we also were asked to evaluate customer service efforts by the department. We found that DWS has implemented 13 out of 14 audit recommendations and is in the process of implementing the final recommendation. We also found that DWS provides adequate customer service and continues to monitor and improve this service.
3. Summary of Report 2015-03: A Performance Audit of URS’ Management and Investment Practices
This report found that URS is transparent, but can take additional steps by disclosing individual employee compensation, designating a records officer, establishing time limits to respond to information requests, and better notifying the public of administrative board meetings. Also, URS’ allocation of investments to alternative assets grew from 16 to 40 percent from 2005 to 2013, simultaneously reducing investment in equities and debt securities. Our investment consultant recommended that URS should consider reducing its alternative asset allocation over time. Fees from alternative investments are driving total operating costs higher, but evidence shows that these fees are well managed. URS board and staff are qualified to perform their fiduciary responsibilities. Finally, the defined contribution investment manager selection and retention processes are satisfactory.
4. Summary of Report 2015-04: A Follow-up of Higher Education Operations and Maintenance Funding Management Practices
In 2011, we reported that the Utah System of Higher Education’s (USHE) operation and maintenance (O&M) funding was at a crossroads for its source of funding. Much has been accomplished since then, but some key policy decisions remain. For example, the Legislature may want to consider reviewing the higher education O&M funding model. Besides some COLA and utility adjustments, higher education institutions do not generally receive an increase in O&M when costs increase, but rather additional O&M is funded when a new building is constructed. We also found that the state’s and institutions’ building inventory records still do not match. Effective management of buildings requires consistent, reliable data. We also found that some other states’ higher education institutions have adopted specific formulas that direct the use of reimbursed research overhead funds. The Legislature may find such a system beneficial in Utah.
5. Summary of Report 2015-05: A Performance Audit of the Office of the Utah Attorney General
This report addresses numerous issues, many of which were areas of concern mutually agreed-upon with the newly elected Attorney General (AG). We found that the Office of the Utah Attorney General (OAG) needs improved performance management for increased accountability, both internally and externally. While the OAG tracks many measures, they are not used to determine its divisions’ success or track the agency’s progress toward established priorities. The OAG also does not produce annual reports addressing performance as many of its peer offices do. We believe such reports should be required to increase the transparency of the office’s performance management. Further, the OAG’s current ethics policy lacks sufficient whistleblower provisions to adequately address internal employee misconduct. In addition, inconsistent implementation of the office’s employee evaluation system needs to be addressed. Finally, the lack of an office-wide electronic case management system has contributed to dropped cases, missed deadlines, and unnecessary time spent searching through paper documents. The newly elected AG has been working to address many of these concerns since the start of this audit.
6. Summary of Report 2015-06: An In-Depth Budget Review of the Office of the Attorney General
The Office of the Utah Attorney General (OAG) lacks adequate processes to contract, fund, and track legal services to state agencies. Payments for services, a third of the OAG’s budget, are appropriated as dedicated credits. The OAG’s longstanding practice of using such payments as dedicated credits, inherited by the newly elected Attorney General, is inconsistent with statute and reduces transparency. Contracts with state agencies lack uniformity and consistency. The current process for providing legal services could place certain federal funds at risk and also makes it difficult to implement legislative compensation increases. Building block appropriations expenditures generally appear to meet their stated purposes, although reporting and oversight of other funds and some building block appropriations are needed. Attorney compensation is on the low end of compensation of similar peers, but some recent legislative increases could not be included in our calculations. However, the OAG’s turnover rates compare favorably to peer groups. Finally, settlement costs and large highway projects have inflated contract attorney costs, but the OAG appears to have adequate controls in place to monitor the quality of contracted attorney services.
7. Summary of Report 2015-07: A Review of Allegations Concerning DFCM Construction Contracting
Based on our review, the Division of Facilities Construction and Management (DFCM) is properly enforcing E-Verify contractual obligations but not enforcing some health insurance and drug/alcohol testing requirements. We found that some allegations related to DFCM and contractor practices fall under the responsibility of the Utah Labor Commission. We also found DFCM follows accepted procurement and contract management practices such as change orders and warranties. However, administrative rule related to programming for construction projects needs clarification. Our review of the Utah State Building Board confirms the Board fulfills a distinct, statutory role in state building activities and contributes to building prioritization and oversight.
8. Summary of Report 2015-08: A Performance Audit of the Utah Poison Control Center
Since the Utah Poison Control Center (UPCC) is not currently defined in Utah Code, it is not clear if the center is fulfilling its mission as intended by the Legislature. Furthermore, the UPCC’s relationship with the University of Utah (U of U) has not been legislatively defined. We found that a transfer of $2.5 million for housing within the U of U was not documented in a written contract. Regarding operations, the cost of inbound calls to UPCC has increased over a five-year span, while inbound call volume has decreased. We found that pharmacist specialists are more cost efficient at answering inbound call than are nurse specialists. Finally, UPCC can use Poison Information Providers as low-cost alternatives to specialists in answering lower-risk exposure calls and informational calls.
9. Summary of Report 2015-09: A Review of CTE Coordination and Program Duplication Between Public Education and UCAT
This audit reviewed CTE coordination and program duplication between public education and UCAT. We found that the LEAs’ Boards of Education, the State Board of Education, and the UCAT Board of Trustees can improve coordination by ensuring that state CTE directors continue to explore opportunities to increase secondary student utilization of ATCs by:
- Having ATC instructors in the secondary school teaching programs that ATCs specialize in.
- Aligning schedules where possible so that secondary students can better utilize the ATCs.
- Providing distance learning to secondary schools.
Furthermore, policies should be created for articulation agreements between secondary schools and ATCs. Policy is also needed to ensure that secondary students receive credit for classes taken at ATCs during evenings and summers. Lastly, the LEAs’ Boards of Education, the State Board of Education, and the UCAT Board of Trustees should identify and review existing duplication, and determine how to more effectively utilize available resources, particularly those available through ATCs.
10. Summary of Report 2015-10: A Performance Audit of USOR's Budget and Governance
This report found that the Utah State Office of Rehabilitation mismanaged its budget through weak budget practices leading to a $4.9 million deficit in 2014, a need for a $6.3 million state supplemental appropriation in 2015, a $5 to 6 million penalty from the federal government, and reduced future spending abilities. Weak governance oversight by the Utah State Board of Education and the Utah State Office of Education prolonged and worsened these problems. We believe that USOR’s mission would be better governed within another state agency, with DWS showing the most overlap of purpose. Finally, the use of the Visually Impaired Trust Fund to cover vocational rehabilitation expenses was imprudent. The current State Superintendent, Utah State Board of Education, and USOR are currently working to address these issues.
Full Report -A Performance Audit of USOR’s Budget and Governance
11. Summary of Report 2015-11: A Performance Audit of CTE Completion and Job Placement Rates
This audit focused on the key differences in completion and job placement rates reported by the Utah College of Applied Technology (UCAT) and the Utah System of Higher Education (USHE). Three key system differences (completion outcomes, program lengths, and calculation methodologies) make system-wide completion rates not comparable. In addition, UCAT is increasingly recognizing smaller student achievements, while USHE does not report completions as a rate because of difficulties identifying which students intend to earn a CTE credential. Job placement rates were also found to be not comparable as the two providers rely on different methodologies. UCAT’s job placement data lacks independence and rigorous validation, while USHE’s system-wide rates include all jobs rather than those that are training-related.
12. Summary of Report 2015-12: A Performance Audit of Culinary Water Improvement Districts
A Performance Audit of Culinary Water Improvement Districts (2015-12) addresses the administrative functions of 16 culinary water improvement districts. We found that 10 of 16 districts could improve administrative functions in five areas: fiscal controls, strategic planning, procurement, policies and procedures, and conflict of interest issues. We also reviewed four districts in-depth and made recommendations to those districts to improve administrative functions. Districts need to take better advantage of available training opportunities to improve administrative functions and reduce risk.