1993 Legislative Audits
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1. Summary of Report 93-01: MAILROOM ISSUES
We have completed our review of issues involving state mailrooms. First, we found that the Multi-line Optical Character Reader (MLOCR) was purchased without an adequate needs analysis. Second, we found that information pertaining to mail delegation agreements for the Department of Human Services(DHS) and the Tax Commission was inconclusive. Third, we found that production mail is most efficiently bar coded by computer, a fact that may make the delegation question moot. Finally, we found that issues surrounding the proposed intelligent inserter purchase need to be more carefully considered.
As has been demonstrated, problems can occur when a needs analysis is not performed to determine if a purchase is really necessary. The Department of Administrative Services staff need to ensure that similar problems to not occur with the proposed intelligent inserter. An intelligent inserter is needed when mailpieces in the same mailing are receiving different inserts. For example, one mailpiece is receiving a bill while another receives a bill and a delinquency notice. Since an intelligent inserter is a sophisticated piece of equipment, one can cost between $150,000 and $250,000. To date, statewide needs analysis has been insufficient and does not justify the purchase of an intelligent inserter. In our opinion, an adequate statewide needs analysis should be performed on the intelligent inserter to determine if this purchase would, in fact, be a benefit to the state.
Full Report - Mailroom Issues
2. Summary of Report 93-02: UNIVERSAL INCOME WITHHOLDING PROGRAM COSTS
The state's role in collecting child support payments will soon expand, and there is a risk that Utah taxpayer costs will increase as well. A new federal law taking effect January 1, 1994, requires that new or amended child support awards include an order for income withholding. The state's Office of Recovery Services (ORS) is expected to collect the child support withheld by employers and distribute it to recipients. Unlike current child support enforcement activities, the bulk of which are federally funded, no federal financial participation is anticipated for the Universal Income Withholding (UIW) program. Thus, Utah taxpayers will pay for all costs in excess of fees.
Although the data available to estimate future costs is not very reliable, we doubt that ORS' current $2.50 per check fee will cover program costs. Our estimate is that costs could be as high as $4.00 per check. Therefore, we recommend that the Legislature raise the fee amount included in House Bill 45 above $5.00 per month, or else recognize that a taxpayer subsidy of the UIW program will be required. However, due to the uncertainty in both UIW program costs and revenues, we feel this topic should be restudied in 1995 when there is program data to review.
Full Report - Universal Income Withholding Program Costs
3. Summary of Report 93-03: WASTE TIRE RECYCLING
Our limited review of Utah's waste tire recycling program found that Utah's prior legislation was unsuccessful because it lacked sufficient regulatory control in conjunction with adequate incentives to develop recycled tire markets. Creating interest in tire recycling through an adequate subsidy program and regulating alternatives to tire recycling, such as landfilling whole tires, can effectively address waste tire problems. There appears to be sufficient demand for waste tires as fuel in Utah's cement industry to utilize the supply of tires disposed each year and also address existing tire piles and landfills.
Waste tire disposal is recognized as a national environmental problem. Tire characteristics make them unsuitable for landfill operations where tires are prone to fires and vermin infestation. Waste tires do, however, lend themselves to recycling because there is a retrievable value in waste tires, primarily as a fuel source. A number of states have successfully addressed waste tire recycling but we could find no consensus as to how a program is best operated. Each of the programs we reviewed does have some commonality of components. Most states utilize some form of incentive either in the form of a direct per tire subsidy or in the form of a grant or loan providing seed money or program support. Additionally, each state we contacted regulates its market to direct tires toward recycling and away from landfills and tire piles.
Utahns discard over 1.6 million tires each year and, as a state, we have accumulated an additional 5 million tires. We believe that legislation to control waste tires is necessary. In addition to a subsidy, any legislation should ban whole tires from landfills and require participant registration and material manifesting to ensure tires are recycled.
Full Report - Waste Tire Recycling
4. Summary of Report 93-04: UTAH TECHNOLOGY FINANCE CORPORATION
The Utah Technology Finance Corporation (UTFC) appears to have a positive effect on Utah's economy and job market. Legislatively charged with the high risk operation of aiding Utah's emerging high-technology start-up businesses, UTFC has struggled in its attempt to become financially independent of state funding. Consequently, UTFC has evolved since its introduction resulting in a gradual shift to lower risk investments and in a number of allegations concerning inappropriate operations. None of these allegations were found to be material in nature. It is our conclusion that the allegations presented us are a direct result of personality conflicts that stem from changes and expansions of the corporation's structure and goals.
Though we believe UTFC is a beneficial organization, it is very difficult to measure UTFC's economic effect in precise quantitative terms. This is because UTFC is just one component in a much larger system of public and private funding sources that provide financial and non-financial assistance for the development and commercialization of high-technology products and ideas. Measuring the effectiveness of UTFC is further complicated by the organization's evolution.
Full Report - Utah Technology Finance Corporation
5. Summary of Report 93-05: MINERAL LEASE FUNDS
This survey responds to a request that our office determine if mineral lease money is spent according to legislative intent, particularly those funds spent by the institutions of higher education and the Permanent Community Impact Board (PCIB). In our opinion, the PCIB fully complies with legislative intent. Specifically, the PCIB spends their allocation on appropriate projects and gives priority to affected counties. Higher education, on the other hand, spends its money on appropriate projects but has a difficult time giving priority to affected counties because of the statutory institutional allocation formula. The outcome of this allocation methodology is that 88% of higher education's allocation goes to Wasatch Front counties which are not heavily affected mineral lease counties. This outcome makes it very difficult, particularly for the non-research institutions, to have much impact on the heavily affected mineral lease counties which are located primarily in the southern part of the state. This difficulty, in part, may account for the apparent lack of priority given in actual institutional spending.
In addition, we also think it is important to note that the issue of whether mineral lease money is being spent according to legislative intent has been a source of debate for years. In particular, the issue of whether higher education spends the money it is allocated as per legislative intent has been argued for years. The Legislature has the power to make whatever changes are necessary to address any concerns it has. Consequently, we would encourage the Legislature to utilize its power to resolve these continuing debates involving mineral lease monies.
Full Report - Mineral Lease Funds
6. Summary of Report 93-06: CHILD WELFARE SYSTEM
Our audit identified problems with Utah's child welfare system and recommends many changes to help the Division of Family Services (DFS) better accomplish its goals of protecting children from abuse or neglect, preserving families wherever possible, and finding a permanent home as soon as possible. The problems we identified in Utah's system are not unique. National experts said Utah's problems are similar to those they have seen in other states. Though we identified problems with the system, we also found DFS' child protection workers generally to be hard-working, dedicated and concerned about children.
The Division of Family Services is the child, youth, and family services authority of the state. To accomplish its goals DFS has developed programs to help families, including child protective services, out-of-home services or substitute care, and in-home services. In fiscal year 1993, DFS reported about 360 caseworkers in these programs investigated over 15,000 referrals of abuse or neglect and provided services to an average of 1,537 children in foster care. The state also has established the Guardian Ad Litem (GAL) program to ensure that a child's legal rights are protected. The GAL program is independent of DFS and is overseen by the state's Court Administrator's Office.
Full Report - Child Welfare System
7. Summary of Report 93-07: MEDICAL MALPRACTICE PRELITIGATION PANELS
We found it to be extremely difficult to determine whether the prelitigation process encourages litigants to either settle or drop their medical malpractice disputes without going to court. There have been too many other changes in tort laws, court rules, and health care practices to isolate the overall impact of these hearings. Our research shows half of those who request a prelitigation hearing either drop or settle their claims before they enter the legal system. However, we could not determine which, if any, of the state's tort reforms are responsible.
Through the mid 1970s and 1980s the Utah State Legislature observed that the rising cost and number of medical malpractice claims was threatening the availability of health care services in the state. A number of reforms were enacted during this period to address what many referred to as the "medical malpractice crisis." The prelitigation requirement, enacted in 1985, was aimed at reducing the cost of resolving medical malpractice disputes by encouraging litigants to meet and discuss their claims before a prelitigation screening panel. The panel, consisting of an attorney, a physician and a lay person, offers the litigants non-binding advice as to whether the case is "meritorious" or "non-meritorious."
In recent years, there has been a debate over the effectiveness of the prelitigation requirement in encouraging an early resolution of claims. Some have proposed eliminating the prelitigation requirement. Others wish to make the process tougher by penalizing those who ignore the advice of the panels. Although we found no conclusive evidence to support either strategy, this report provides information which should help legislators decide whether to continue the prelitigation process, enact additional reforms, or pursue other alternatives.