2004 Legislative Audits
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1. Summary of Report 2004-01:
DEAF AND BLIND SCHOOL
The Utah School for the Deaf and Blind's (USDB's) administration overstated its claim that it was forced to leave vacant six instructor positions in order to comply with the cuts imposed during the Legislature's July 2002 special session. The USDB's cash balances are not primarily made up of restricted funds as previously represented. In fact, contrary to what USDB administrators told legislators, the school actually has broad discretion in how it uses its cash reserves. We also found that the USDB's administration has not always followed the guidelines described in statute for adjusting teachers' salaries each year. Finally, we believe the management of the USDB can improve in three areas: 1. Financial management 2. Outside oversight 3. Educational effectiveness measures.
2. Summary of Report 2004-02: DIVISION OF MOTOR VEHICLES
The Tax Commission's Division of Motor Vehicles (DMV) has, despite the growth in vehicle transactions, improved its efficiency over the last ten years. But, while it has made improvements, the DMV can better portray the cost of collecting revenues from vehicle transaction fees for the fee beneficiaries or recipients. This audit demonstrates the development and application of a process-based cost allocation methodology.
Digest of the Report - A Performance Audit of the Division of Motor Vehicles (Report #2004-02)
3. Summary of Report 2004-03: $23.7 MILLION TEXTBOOK SUPPLEMENTAL EXPENDITURE FOLLOW-UP
The effectiveness of the $23.7 million textbook supplemental funding provided by the 2001 Legislature does not appear to have been maximized. First, district textbook expenditures did not match the state's textbook expenditure efforts. Second, some districts may have used supplemental funds for purposes other than those upon which the supplemental was based. Third, the supplemental funds were, for the most part, allocated proportionally by the Utah State Office of Education (USOE) with the support of the Legislature. Perhaps as a result of these three concerns, just half of the May 2000 textbook shortage was satisfied by April 2003. In October 2003, the USOE reported on unmet textbook needs. However, we believe the methodology appears flawed.
4. Summary of Report 2004-04: STATEWIDE EMPLOYEE INCENTIVES
Cash incentives - while granted on a lesser scale than the private sector - have long been used by state government agencies as a method for rewarding employee performance. We found that state agencies have reduced cash incentives. In fiscal year 2003, state agencies in Utah combined to grant just under $3.1 million in cash incentives to employees, as a supplement to regular employee compensation. However, cash incentive practices among agencies are inconsistent. In addition, administrative leave (time off with pay) is also used as a performance incentive in lieu of cash. This appears to happen much less frequently but is difficult to track. In our opinion, the Department of Human Resource Management needs to improve the rules and processes governing incentives.
5. Summary of Report 2004-05: ADMINISTRATIVE OFFICE OF THE COURTS
The Judiciary Interim Committee requested an audit which addressed AOC growth and judicial budget prioritization issues. While the AOC's growth has been substantial, its growth is comparable to the rest of the judicial branch. However, we believe the Judicial Council can improve the information used in the Judicial Council's budgeting and prioritization decisions. Further the relationship between the AOC and the judges it supports can be improved by addressing communication issues.
6. Summary of Report 2004-06: DEPARTMENT OF ENVIRONMENTAL QUALITY'S COMMERCIAL WASTE FACILITY OVERSIGHT
Regulatory oversight of hazardous and radioactive waste disposal in Utah appears to adequately follow safeguards for the health and safety of Utah's population. There are, however, concerns with some questionable operating procedures and accessibility of information that may limit DEQ's program effectiveness. We found:
1. DEQ administrative support of waste disposal oversight needs improvement.
2. DEQ should review adequacy of funds to improve operational efficiency.
3. Performance of groundwater oversight program raises questions.
4. Disposal facility oversight can improve.
5. DEQ administrative controls can improve.
6. Fee collection regulations need clarification.
7. Summary of Report 2004-07: A Review of Decision-making Process Used to Obligate Federal TANF Surplus Funds
The Office of the Legislative Auditor General was asked to review how the Department of Workforce Services (DWS) obligated surplus funds from the federal Temporary Assistance for Needy Families (TANF) grant. Our limited review determined that a legitimate public process was used by DWS and the State-wide Council to obligate federal TANF surplus funds. In addition, all spending proposals were presented to the Legislature in General Session 2001 and funding for the largest TANF project (the eREP system) was obligated through legislative intent language in 2002.
8. Summary of Report 2004-08: Constitutional Defense Fund Expenditures and Administrative Controls
Overall, the Constitutional Defense Fund (the Fund) appears to be utilized as directed by the state legislature. Most of the Fund's money has been appropriated to the RS-2477 Rights-of-way account within the Governor's office. Based on a limited review, most expenditures appear in line with legislative intent. However, there have been problems with both the level of information exchange and the administrative control exercised by the Governor's office in its oversight of account expenditures.
Digest of the Report - A Review of the Constitutional Defense Fund Expenditures and Administrative Controls
9. Summary of Report 2004-09: DAVIS AND WEBER COUNTIES CANAL COMPANY
The Davis and Weber Canal Company (D & W) is a non-profit entity that provides water to private shareholders as well as public entities. We were asked to review D & W's financial position, but financial information maintained at D & W made this very difficult. In particular, D &W's use of a cash rather than an accrual basis made an assessment of financial viability difficult. If D & W is to be financially viable, they need to ensure that shareholder assessments accurately reflect their obligations and expenses each year.
Full Report - A Performance Audit of Davis and Weber Canal Company
10. Summary of Report 2004-10: UTAH'S USE OF THE FEDERAL E-RATE PROGRAM
Most Utah school districts have not taken full advantage of the Federal E-rate program and some still do not understand the potential of the E-rate program and what revenues it can provide for Utah's schools that struggle financially. The E-rate program was instituted in the Telecommunications Act of 1996 to help bring Internet access to every school and library in the country by providing a discounted education rate (E-rate) for telecommunications expenses. Utah has received $46 million in E-rate commitments since 1998 and their annual commitments have increased in each of the past years. However, our best estimate shows that Utah may have been able to secure as much as $47 million more in additional commitments had school districts applied for reimbursement.
11. Summary of Report 2004-11: DIVISION OF FACILITIES CONSTRUCTION AND MANAGEMENT
Although the agency had serious problems with one past project, the Division of Facilities Construction and Management has learned from its mistakes. Today the division is a well-managed organization that provides quality construction management services for the state. This report examines the division's current method of selecting contractors for state construction projects and, in particular, the division's "value-based" approach to awarding state construction contracts.