2010 Legislative Audits
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1. Summary of Report 2010-01 : A Performance Audit of Utah Medicaid Managed Care
The Division of Health Care Financing (HCF or Utah Medicaid program) has not provided adequate oversight over its managed care program. Utah Medicaid has not been fully aware of costs or utilization of the managed health care plans (health plans). This insufficient oversight has led to higher than necessary costs in the Utah Medicaid program. In total, we identified between $13 to $19 million in potential future cost-saving opportunities for the Utah Medicaid program. These cost savings hinge largely on Utah Medicaid expanding its management vision to be more dynamic, best-practice driven, and cost-saving centered.
Full Report - A Performance Audit of Utah Medicaid Managed Care
2. Summary of Report 2010-02 : A Performance Audit of the Utah Antidiscrimination and Labor Division
Although UALD's informal complaint process should be completed promptly, some employment cases are neglected for years. Utah already sets specific time limits for processing housing discrimination complaints and should establish similar time limits for employment discrimination complaints. The process can be streamlined and customer service improved by assigning investigators more promptly. This audit also raises concerns about procedures specific to housing discrimination complaints that need to be reviewed and/or changed, including requiring final interviews whenever a reasonable cause determination is indicated.
3. Summary of Report 2010-03 : A Performance Audit of Counties' Municipal Services
This audit found that counties that cannot identify their MSF funding sources cannot demonstrate that their funding is appropriate. All counties with MSFs should have clear accounting of those MSF funding sources and uses. Additionally, counties that chose or are required to have an MSF should perform a service cost review, and in doing so identify how much of the cost can be attributed to unincorporated county residents versus incorporated city residents. The audit also found that there are neither federal nor state restrictions on how counties can expend their federal PILT money. We also found that most fourth-class through sixth-class counties sampled pay for municipal services to their counties from their general funds.
Full Report - A Performance Audit of Counties' Municipal Services
4. Summary of Report 2010-04 : A Limited Review of State Agency Regulatory Fees
Receipt of general fund money to cover expenditures varies among state regulatory agencies. In some regulatory agencies general fund money is not appropriated; expenditures are generally covered with regulatory fees. In other regulatory agencies, general fund money is appropriated to cover a portion of expenditures. It appears possible that regulatory fees in some of these agencies could be increased to cover a larger percentage of the cost of regulation. In fact, regulatory fees in other states offer support for some regulatory fee increases in Utah. By increasing fees, those regulated, rather than the general public, would bear more of the cost of regulation, possibly freeing up general fund money for other uses. Based on the information collected, we believe regulatory fees merit legislative consideration.
Full Report - A Limited Review of State Agency Regulatory Fees
5. Summary of Report 2010-05 : A Limited Review of Workload in the Second District Court and the Fifth District Juvenile Court
The Judicial Council recommended to the Legislature in November 2009 that a vacant judgeship be transferred from the Second District Court to the Fifth District Juvenile Court. It appears to us that the recommendation of the Judicial Council is reasonable. Available evidence indicates a much more acute need for judicial resources in the Fifth District Juvenile than in the Second District. However, weighted caseload data from the district court should be updated to provide more reliable information in the future.
6. Summary of Report 2010-06 : A Performance Audit of the Driver License Division
This report reviews the oversight which the Driver License Division (DLD) has over the third-party tester program and other select policies and procedures which govern the DLD's actions. During the audit, we observed improper commercial driver license (CDL) examinations, which had the appearance of fraud, and the lack of necessary policies to oversee third-party tester activities. The risk associated with these findings is substantial, because proper testing helps determine whether CDL operators possess the skills required to safely operate commercial vehicles. The DLD should create policies to strengthen their oversight over Utah's CDL program and limit the number of CDL third-party testers. The audit also found that some DLD field offices allowed customers to use electronic translation dictionaries and we recommend the DLD clarify its policy concerning translation dictionaries. Next, the audit found that since the 2006 fiscal year, peace officer absenteeism to DUI administrative hearings has increased. When an officer fails to attend the hearing, no action can be taken against the driver and a potentially dangerous driver continues to drive under a valid license until a court hears the case, if at all. However, we found that when officers attend the hearings, action is taken on a driver's license 82 percent of the time. Finally, beginning January 4, 2010, state law required the DLD to verify a person's identity and lawful presence in the United States and Utah which initially resulted in long wait times at DLD field offices. The audit reports that as examiners and offices have adjusted to the new system and workload, average wait times at the DLD field offices have been decreasing.
Full Report - A Performance Audit of the Driver License Division
7. Summary of Report 2010-07 : A Review of the Use and Accountability of RAP Tax Funds Statewide
Governing statute for Utah's Zoo, Arts, Parks, and Recreation tax (referred to as the RAP tax) contains elements that are inconsistent and unclear. The Legislature should address these code concerns through a review and clarification of both the county and municipal RAP portions of the Utah Code. Given current statutory requirements, some RAP funded programs and projects appeared to be inconsistent; however, the majority seemed reasonable. Finally, the accounting transparency of RAP funding varies among and within county and municipal accounting systems. Nonetheless, no cases were found for which RAP revenue and qualifying expenditures could not be accounted for somehow.
8. Summary of Report 2010-08 : A Limited Review of the State's Career Service System
Almost two-thirds of the approximately 24,000 state employees are considered to be career service, or merit, employees. Career service systems were designed to protect public employees from unfair personnel practices occurring with political changes. Utah, like its surrounding states, must continually evaluate the balance between this need and its ability to maintain only the highest-performing employees. This audit reviewed potential alternatives to the state's career service system. For example, Texas, Florida, and Georgia do not have traditional career service systems, yet they maintain merit principles of fair and equitable treatment of employees. The Legislature may choose to adopt some of these changes or maintain the current system with an increased emphasis on performance management. Agency managers could be more effective at managing employee performance under the current system by properly documenting employee discipline on annual performance evaluations, attending a training course provided by the Department of Human Resource Management (DHRM), and using DHRM's electronic performance management tool.
Full Report - A Limited Review of the State's Career Service System
9. Summary of Report 2010-09 : A Limited Review of State-Funded Business Programs and Initiatives
A review of state funded business programs and incentives showed no duplication of services provided to Utah businesses. Instead, each program focuses on a specific business need with little overlap. We believe that the structure of the Business Resource Centers (BRC), administered by the Governor's Office of Economic Development (GOED), is a natural check on possible duplication. An examination of program expenditures gives further evidence of the uniqueness of each program. In fact, Utah provides much greater program coordination than other states we reviewed. In order to improve coordination going forward, GOED should consider having the Business Resource Center Board become the coordinating board for all business programs and incentives. Additionally, the GOED should be more involved in monitoring and providing oversight over their contracted entities.
10. Summary of Report 2010-10 : A Performance Audit of the Working 4 Utah Initiative
The Legislative Auditor General found that most state agencies need better performance measures to monitor the productivity of their employees. The lack of adequate performance measures made it difficult to identify the effect of the four-day work week on employee productivity. However, anecdotal evidence suggests that some functions in state government perform better under the new schedule while other functions appear to be ill-suited to a four-day work week. Furthermore, it has been reported that the initiative cut the cost of government by many millions of dollars. These claims were found to be overstated. Finally, several questionable personnel policies and practices were examined. The growing acceptance of these policies could lead to a reduction in employee productivity.
Full Report - A Performance Audit of the Working 4 Utah Initiative
11. Summary of Report 2010-11 : A Performance Audit of the Department of Alcoholic Beverage Control (DABC)
This audit found that the Department of Alcoholic Beverage Control (DABC) commission has habitually violated the state's open meetings laws and some commissioners have potential conflicts of interest that have not been adequately disclosed. Additionally, the DABC has experienced necessary growth in retail stores, but has done so without an adequate business plan that considers all alternatives to building and the placement of stores. While retail operations of the DABC are profitable for the state, store productivity could be improved. The report also addresses how the licensing and compliance (L&C) section of the DABC should enhance its performance by formalizing policies and procedures and the L&C should develop policies to ensure adequate communication with liquor law enforcement. Finally, the report suggests some licensing issues the Legislature could consider, including revisiting the quota for liquor licenses, as well as allowing the commission to delegate approval authority to the executive director regarding temporary special event beer permits and single event permits.
12. Summary of Report 2010-12 : A Performance Audit of School District Travel Accountability
This audit shows that total travel expenditures amount to less than 1 percent of the total annual expenditures in five sampled school districts. Also, the report shows that most school administrators and boards in our sample group have started to cut travel expenditures because of difficult budget times. Two recommendations were made. First, that districts review the number and type of association memberships and determine if continued involvement is appropriate in light of budget cuts. Second, that districts review their involvement in the Chinese Bridge Delegation travel program because Utah appears to over-participate, compared to other states. The audit also found that travel expenditure reporting to the Utah State Office of Education and to the National Center for Education Statistics (NCES) is inconsistent. Recommendations were made to USOE to standardize the reporting requirements so that reporting is consistent and comparisons can be made among districts.
13. Summary of Report 2010-13 : A Performance Audit of Charter School Oversight
The State Charter School Board has not established clear standards to evaluate schools' financial performance. The Board needs to adopt policies that further define how its disciplinary and termination processes will proceed. The audit identified a small number of schools that are struggling to adhere to some financial best practices. The State Charter School Board should enhance its financial oversight by requiring training for charter school board members, enforcing financial reporting requirements, and further utilizing audited financial statements. The audit also found that acceptable uses of Charter School Revolving Loan funds need to be further defined. Loan requests for these uses should be prioritized by the Charter School Revolving Subaccount committee as allowed by statute.
Full Report -A Performance Audit of Charter School Oversight
14. Summary of Report 2010-14 : A Follow-up of Utah's Medicaid Implementation of Audit Recommendations
This report presents an in-depth follow-up to two Medicaid audits, A Performance Audit of Fraud, Waste, and Abuse Controls in Utah's Medicaid Program (Report 2009-12) and A Performance Audit of Utah Medicaid Managed Care (Report 2010-01). We found that the recommendation in Report 2009-12 are starting to be implemented. However, more needs to be done to institute management controls over the prior authorization process and to improve independence of the oversight functions in the Department of Health. Recommendations in Report 2010-01 are still mostly in-process though progress is being made and some cost savings has been achieved.
15. Summary of Report 2010-15 : A Performance Audit of County and Municipal TDR Use in Utah
Although Transfer of Development Rights (TDR) programs are commonly used nationwide, they are not widely used in Utah. TDR programs transfer development density away from property where development is not desired to property where development is desired. We identified five Utah counties and municipalities that use TDRs. Four operate within a structured TDR program framework while one county took a non-structured TDR approach that has caused controversy. The ultimate goal of any TDR usage is to achieve a public preservation purpose. All five Utah entities achieved, or are set up to achieve, such a public purpose. Nonetheless, the Legislature may wish to provide statutory guidance to ensure that all Utah TDR use is guided by a program structure with openly outlined procedures.
16. Summary of Report 2010-16 : A Performance Audit of Utah Medicaid Provider Cost Control
This audit identifies some instances of fraud, waste, and abuse in the Utah Medicaid program, including clinic overcharging, weak pharmacy controls, and suspected fraud at a women's clinic. Additionally, the audit identifies problems with Utah Medicaid's internal payment system and policies, including payment for the transportation of unborn babies, duplicate payments, and drug costs that are higher than necessary. Finally, we recommend that the Legislature look at creating a Medicaid Office of Inspector General to increase independence and oversight of potential fraud, waste, and abuse.
17. Summary of Report 2010-17 : A Limited Review of Conflict of Interest Allegations at the Utah Transit Authority Board
We conducted a limited review of allegations concerning a conflict of interest of a member of the Utah Transit Authority (UTA) Board of Trustees. First, we found that a conflict of interest did exist at UTA, but disclosures of that conflict were made as required by Utah Code. Second, we found no evidence to support concerns that the trustee interfered in the site selection of a FrontRunner stop in Draper. Finally, based on the facts we were provided and an interpretation of Utah Code 17B-2a-814(5) by attorneys from the Office of Legislative Research and General Counsel, we found that the trustee may have violated a specific provision of the Public Transit District Act concerning the misuse of official information. We recommend that the Legislature consider reviewing sections of the Public Transit District Act to determine if the statute still meets Legislative intent. Further, we recommend that the Audit Subcommittee consider referring this matter to the Attorney General for additional review and that the UTA board enhance its policies governing board member conflicts of interest.