2018 Legislative Audits
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1. Summary of Report 2018-01: Performance Audit of the Division of Juvenile Justice Services
This audit reviewed the efficiency and effectiveness of the Division of Juvenile Justice Services (JJS or division). We found that despite decreasing juveniles served, the cost per juvenile has increased and this metric has not been tracked or reported by the division. JJS management functions needs to improve in that significant decisions have been made with regards to facilities and programming without conducting a cost-benefit analysis. We also found that JJS needs to improve transparency in the information that they present to policy makers. Finally, JJS should improve partnerships with private providers to help improve programming at a potential cost savings to the state.
2. Summary of Report 2018-02: An In-Depth Budget Review of the Utah Department of Health
This report found, through contracting with Milliman actuaries, that $74.6 million could have been saved from 2014-2016 if each plan had achieved the most efficient price, or on average $25 million per year. We believe that a more reasonable annual savings would be $4 to $8 million. DOH should regularly conduct efficiency analysis on the ACOs beyond the annual rate setting process. In addition, we found that in 2014, DOH randomly assigned over 23,000 members (18 percent of the ACO population) to plans, with approximately $50 million in total annual costs, DOH should consider assigning recipients who do not self-select a plan to a more efficient plan. DOH is not providing a strong enough control environment for the ACOs. We found the inconsistent coding and budget structure complicated our analysis. DOH should improve budget controls and reporting to foster a healthier review of its budget.
3. Summary of Report 2018-03: Performance Audit of the Inspector General of Medicaid Services
We found that the Office of the Inspector General of Medicaid Services (OIG) neglected independent oversight of Accountable Care Organizations (which were responsible for 38% of Medicaid expenditures in 2017). We also found that some OIG reporting and audit practices needed improvement. Finally, we recommended that the Legislature consider restructuring the OIG to increase its accountability and productivity.
4. Summary of Report 2018-04: A Review of Best Practices for Internal Control of Nonprofits Associated with Government
This audit surveyed nonprofit entities associated with government and found that a high percentage of nonprofits were missing financial controls and/or key policies. Our review showed that governmental entities have sufficient influence over associated nonprofits to ensure controls are in place but the lack of financial controls at some nonprofits suggest that these entities are not exercising their influence. While House Bill 55 in the 2017 Legislative General Session defined a governmental nonprofit, there is still ambiguity about what is meant by financial support and government control. As this is a new form of government, the Legislature might want to consider allowing governmental nonprofits to hold closed board meetings to discuss information such as trade secrets and proprietary data.
5. Summary of Report 2018-05: A Performance Audit of Inventory and Security Controls at Institutions of Higher Education
This report found that seven of eight institutions of higher education are not consistently tagging or tracking highly pilferable noncapital assets, despite many institution policies requiring it. Examples of noncapital assets that have not been tagged or tracked include projectors, desktops, laptops, microscopes, TVs, etc. Auditors found these assets are vulnerable by successfully entering institutions’ buildings after nightly lockup procedures. Within those buildings, 150 rooms with valuable assets were not secured. Furthermore, many master keys have been lost or remain unaccounted for, which may further compromise building security and the assets stored within.
6. Summary of Report 2018-06: A Performance Audit of Selected Public Education Initiative Programs
We conducted a performance audit of three public education initiative programs funded through USBE. First, the Carson Smith Scholarship Program needs to strengthen the eligibility determination process, scholarships need to be awarded according to the program’s guidelines, and the parent verification process needs to be followed. Second, the level of initiative funding for ProStart needs to be reviewed by the Legislature because in recent years the funding has increased, but student enrollment has decreased. Also, USBE needs to improve controls for ProStart’s reimbursement process. Lastly, while meeting the low-income requirement, the UPSTART program’s population is shifting to students in families with no restriction of income. The Legislature should review this initiative and determine whether the program’s focus should be on students in low-income families.
7. Summary of Report 2018-07: A Performance Audit of the Utah State Tax Commission
This audit examined the Tax Commission’s oversight of income tax credits and property tax administration by county assessors. First, Utah’s income tax credits for research activities lack a control form, while Utah’s other large tax credits and research activities credits offered in other states require either a form, schedule, or certificate that provide valuable use data. Therefore, we recommend the Tax Commission develop a control form for the research activities tax credit which can collect data to assist the Legislature as it conducts regular reviews of the tax credit. Next, residential real property assessments by some county assessors are consistently low, which shifts some of the Basic School Levy’s tax burden to other property assessed at fair market value. We recommend the Tax Commission tighten the assessment level standard to address this issue. Finally, business personal property audits were found to be productive; however, their use by counties has been inconsistent and can improve. To improve consistency, we recommend the Legislature consider statutory changes to first, require a minimum number of audits and second, allow counties to perform on-site audits under the oversight of the Property Tax Division when appropriate. We also recommend the Property Tax Division revise the rates charged to counties for personal property audits.
Full Report - A Performance Audit of the Utah State Tax Commission