1994 Legislative Audits


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1. Summary of Report 94-01: MOTOR VEHICLE REGISTRATION

During the 1993 legislative session, counties requested a significant increase in the compensation they receive to perform state motor vehicle functions under contract. During the session, a portion of the additional funding request was appropriated, and this audit was requested. A major factor in determining the compensation which counties deserve is the efficiency of the motor vehicle system. Early in our review of system costs it became apparent that neither customers nor taxpayers benefitted from some of the existing practices. Therefore, our audit work included identifying ways to reduce customer inconveniences and administrative inefficiencies.

Rather than being designed for efficiency, Utah's motor vehicle system evolved with both state and county government involvement. Historically, the state registered vehicles for use on public roads while counties collected property tax on vehicles. Although customer inconveniences and administrative inefficiencies have been discussed for many years, the involvement of both state and county organizations have made it difficult to streamline the system. Some problems remain unsolved largely due to the overlapping state and county jurisdictions each guarding their own interests.

Full Report - Motor Vehicle Registration

2. Summary of Report 94-02: GUARDIAN AD LITEM

Utah's program can be improved if Guardians Ad Litem (GALs) uniformly follow procedures required by recent legislation and national standards. Recruiting more citizen volunteers to help GALs is also needed. As part of our recent audit of Utah's Child Welfare System (report 93-06) we were asked to review the effectiveness of the GAL program. During that audit, GALs refused to allow us to review their records, citing attorney-client privilege as the reason. An ensuing legislative subpoena was "quashed" in court when the judge agreed with the attorney-client privilege argument.

Though we have identified some concerns with the program which are addressed in this letter, we believe the guardians perform a very valuable and important role in the state's child welfare system. Juvenile court judges interviewed generally praised the guardian's work given their limited funding and limited number of volunteers in the past. Also, during our audit of the state's child welfare system, we found instances where the guardians took a very active role in protecting the child.

During our review, the Legislature passed House Bill 396 which addresses many of our concerns. This statute increases funding for the program and requires GALs to adhere to many Court Appointed Special Advocate (CASA) standards. These standards are recognized nationally by child advocacy experts and are used by many GAL programs across the country. Because many of our concerns were addressed by recent legislation, we limited fieldwork in this area.

Full Report - Guardian Ad Litem

3. Summary of Report 94-03: MEDICAID RECIPIENT CONTROLS

The Division of Health Care Financing's (HCF) restriction program, designed to control recipient overuse of Medicaid benefits, is effective in reducing excessive use of services, but can improve its effectiveness and efficiency. Expanding this program can increase effectiveness by controlling more recipient overuse.

Higher efficiency can be achieved by using computer resources better. Enrolling overusing recipients more efficiently can control overuse sooner, thereby increasing associated cost savings. Further, in response to a request to review specific procedures related to Medicaid, we found that HCF has appropriate procedures in place to respond to a recipient who questions a charge on an Explanation of Medicaid Benefits summary. Also, we found that reasonable efforts are made to ensure that applicants meet eligibility requirements, specifically asset limitations, when applying for benefits through the Office of Family Support in the Department of Human Services.

Full Report - Medicaid Recipient Controls

4. Summary of Report 94-04: STATE MAIL SERVICES

Utah has the ability to consolidate its major mail service operations and in so doing, lower the cost of mail services. Cost savings would result through better utilization of the Department of Administrative Services Bureau of Central Mail Services automated mail processing equipment. Success of a consolidation effort now is both important and timely. Important because $365,000 to $585,000 can be saved annually and timely because postal rates will be increasing and building space not previously available may be available with a major service user.

The U. S. Postal Service (USPS) is emphasizing the use of machine-readable mail by offering rate discounts to users willing to perform tasks normally performed by the USPS. A first-class mail rate discount up to 20 percent is possible if one, users are willing to print a code, that can be scanned by automated equipment (barcode), on their mail so the USPS can electronically process it and two, presort mail by zip code so the USPS won't have to.

Full Report - Utah State Mail Services

5. Summary of Report 94-05: DISTRICT COMPUTER SERVICES

This audit was conducted in response to a request to review the staffing levels at District Computer Services Section (DCS) within the Utah State Office of Education (USOE). The request was generated by a legislator who thought that staffing has not decreased even though in fiscal year 1990 DCS consolidated with the Division of Information Technology Services (ITS) in the Department of Administrative Services. Further, there was a concern that one of the largest customer school districts recently decided to stop using DCS and perform its own data processing, which raised questions about the staff necessary given the assumed reduction in workload.

We found that DCS staffing has decreased, both at the time of the consolidation and again shortly afterwards. Further, although DCS and ITS consolidated, the only functions taken over by ITS were the responsibility for telecommunications lines and the actual machine processing of data. DCS is still responsible for all support of districts' data processing. We also found that the decision by Jordan School District to conduct more of its data processing independently is not a total withdrawal of business from DCS. Several computer applications will continue to be done for Jordan at DCS, and Jordan will continue to be DCS's largest customer. Therefore, we do not believe that a recommendation to reduce DCS staffing is appropriate at this time.

Full Report - District Computer Services

6. Summary of Report 94-06: TAX COMMISSION'S ADMINISTRATION OF LOCAL SALES TAXES

Local government officials feel the Tax Commission's administrative fee for collecting and distributing local sales taxes is too high. According to Utah Code, the fee is to "reimburse the commission for the cost to it in rendering the services," but may not exceed 2.5 percent of revenue. In fiscal year 1994, the commission charged local governments the maximum allowable fee of $6.6 million. In response to the local governments' concerns, Senate Bill 47 of the 1994 General Session directed us to "conduct an audit of the collection services provided by the commission . . .to determine actual collection and distribution costs."

The level of the administrative fee is disputed because state and local government officials have differing views about what costs should be covered by the fee. Local governments feel they should not be allocated any of the common costs, because the state would incur those costs even if there were no local tax. However, Tax Commission practice has been to allocate half of common costs to local governments because the functions performed are essential to collecting the local tax.

Because the Tax Commission does not have a cost accounting system by tax type, sales tax costs must be estimated. Total sales tax costs for fiscal year 1994 were about $10.25 million. About $2.25 million were marginal costs due to the local tax. Another $8 million were common costs that need to be divided between the state and local governments.

Full Report - Local Sales Tax Administration

7. Summary of Report 94-07: DEPARTMENT OF TRANSPORTATION FOLLOW-UP

The Utah Department of Transportation (UDOT) has implemented most of the audit recommendations found in Utah Legislative Auditor General reports dating back to 1982. As a result we believe that UDOT is functioning at a higher level of efficiency and effectiveness today than it has in the past. In total, 70 recommendations were made in the past audits dating back to 1982. Because of time constraint, this follow-up review was only able to examine UDOT compliance with 55 of the 70 recommendations.

This follow-up review examined UDOT's compliance to recommendations reported from eight major audits. The follow-up audit found that UDOT management had generally complied with the recommendations of the four most recent audits. These four audits were reported since 1990 and covered a wide variety of issues such as fleet management, building construction, and research of new products.

In addition, the follow-up audit examined the extent of UDOT compliance with four maintenance audits completed 7 to 12 years ago. We found the implementation of some of these audit recommendations more difficult to review because of significant changes in funding and agency operations. In our opinion, the more important recommendations of the maintenance audits have been implemented. However, some of the recommendations have become obsolete because of organizational changes and others were not implemented because management did not agree with the recommendation.

Report - Follow-Up Audit of Ut. Dept. of Trans.

8. Summary of Report 94-08: FOSTER CARE CITIZENS REVIEW BOARDS

We reviewed the Foster Care Citizen Review Boards created by Utah Code 78-3g-103. This legislation established pilot programs in three locations--Ogden, Salt Lake, and Price district offices. We were asked to evaluate whether Citizen Review Boards (CRB) shorten the time children spend in foster care and reduce the number of foster care placements. At this time we cannot assess whether a review process is effective in shortening the time in care or reducing the number of placements. The CRBs have not been reviewing cases long enough to make meaningful comparisons. If the Legislature desires, the Legislative Auditors Office could conduct another review in the future when the CRBs have reviewed more cases. Even though we can not tell if a review process is effective in reducing time in care and number of placements, we determined that reviews are valuable in helping to identify needed services on a case and we identified ways that a review process can improve.

Citizen Review Boards are panels of citizen volunteers not associated with the Division of Family Services (DFS) who review randomly selected cases of children in foster care. The review focuses on whether the child(ren) and parent(s) are receiving appropriate services, whether the child will be placed in a permanent home as quickly as possible, etc. The Administrative Review Boards are panels composed primarily of DFS' staff who review cases for similar items.

Report - Foster Care Citizens Review Board

9. Summary of Report 94-09: OFFICE OF RECOVERY SERVICES

This audit was initiated in response to a Legislative Process Committee request for an in-depth budget review of the Office of Recovery Services (ORS). In addition to the in-depth review, we were asked to determine if appropriate collection methods were used by the Bureau of Child Support Services (BCSS). Also, we reviewed the Bureau of Investigations and Collection's (BIC) effectiveness at detecting and deterring welfare fraud. This audit identifies four areas of concern:

1. There seem to be few consequences for those people who commit welfare fraud.
2. Stronger judicial action is justified in some child support cases but is not taken by BCSS
3. BCSS child support collections could increase by as much as $2.9 million if more determined collection approaches were made.
4. AFDC collections need to be improved. Because of a greater focus by caseworkers on non-AFDC cases, as much as $1.7 million in FY 1993 AFDC collections were lost.

Report - Office of Recovery Services

10. Summary of Report 94-10: APPLIED TECHNOLOGY EDUCATION FUNDING

The State Legislature should develop a more rational approach for distributing funds for applied technology education. Over the years, state officials have made numerous changes to the funding formula as they have tried to respond to many individual funding needs. As a result, funding for applied technology education has evolved into an overly complex process which is not guided by a unifying set of policies which apply statewide.

Because different rules apply to different circumstances, some regions receive a greater share of state funds simply because they draw from a better set of funding sources than others. We recommend that the Legislature study the problems identified in this report and consider developing alternative strategies for funding applied technology education.

Report - Applied Technology Education Fund