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
8. Summary of Report 2018-08: An In-depth Budget Review of the Utah State Tax Commission
We were assigned to conduct an in-depth budget review of the Utah State Tax Commission (Tax Commission). We found that although improvements have been made to collect delinquent taxes, additional options are available which could assist the Taxpayer Services Division to increase collections of a greater portion of the $552 million in delinquent taxes. We also reviewed metrics for the Motor Vehicle Enforcement (MVED), Taxpayer Services, Processing, and Motor Vehicle Divisions (DMV) and found improved overall performance, as well as areas where the divisions can continue to improve. We found that the options for license plates in Utah are in line with other states but that the management of license plates could benefit from the establishment of a General Fund restricted account for more transparent costs. In the final chapter, we found that the Tax Commission does well in managing data technology and management and credit card processing costs. Also, a long-term tax system modernization project was partially funded with nonlapsing balances, which is not ideal as transparency is lost. This audit offers recommendations to the Tax Commission, the Legislature, the Office of the Legislative Fiscal Analyst, and the Division of Finance.
9. Summary of Report 2018-09: Performance Audit of Secondary School Fees
This audit examined the school fee practices in secondary schools in both school districts and charter schools. We found widespread violations of law throughout the education system involving a general lack of control and oversight from both the Utah State Board of Education and local school boards. Specifically, Utah students have been charged many fees without proper approval. Also, low-income students who qualify for fee waivers have nevertheless been required to pay to participate in school-sponsored activities. In addition to fees, students have been asked to fundraise substantial amounts of money without clear legal guidelines. The audit report makes multiple recommendations for policy changes to address our findings.
Full Report - A Performance Audit of Secondary School Fees
10. Summary of Report 2018-10: A Performance Audit of Utah’s Temporary Assistance for Needy Families Program
We reviewed Utah’s Temporary Assistance for Needy Families (TANF) program, a federal block grant administered by the Department of Workforce Services (DWS). The goal of the TANF program is to help needy families become self-sufficient. We found that while DWS invests significantly in case management, it is not tracking whether participating families are gaining self-sufficiency. Instead, DWS tracks the number of positive case closures, which is not sufficient. Better performance metrics that track family outcomes is needed. We also reviewed contract oversight and found many essential elements were missing. Finally, the process for selecting TANF program contracts and allocating resources is informal and not driven by existing data. Using data about TANF recipient needs as well as identifying TANF program contracts with proven efficacy will enable DWS to improve family outcomes.
11. Summary of Report 2018-11: A Performance Audit of the Utah Board of Regents
The Board of Regents (the Board) is statutorily established to control higher education in Utah, but it does not provide adequate oversight of tuition increases. We found the Commissioner’s processes inflate tuition increases with little analysis to support the rising tuition costs being proposed to the Board. In the last five years, tuition increased $131.7 million; almost three times what was needed to meet the legislative compensation match of $35.6 million. We also found that the Board lacks strategic focus in its reports and that the information needed to determine historical progress of the Board’s past goals is lacking. This unclear strategic focus appears to have led to stakeholder confusion about the Board’s priorities. We finally found that the Board can improve its oversight of the Utah System of Higher Education by bolstering the independence of the audit function through following generally accepted audit standards.
Full Report -A Performance Audit of the Utah Board of Regents
12. Summary of Report 2018-12: A Performance Audit of Homeless Services
We were asked to identify the efficiency and effectiveness of services for the homeless. However, due to problems with the data in the Homeless Management Information System, we were unable to produce reliable performance measures of individual service programs. We also found that Division of Housing and Community Development does not consistently utilize performance measures to evaluate contract outcomes. In addition, due to poor data and changes in definitions, the division erroneously reported that chronic homelessness had declined by 91 percent over a ten-year period ending in 2015. To create a more data-driven, results-oriented homeless services system, we recommend that the State Homeless Coordinating Committee adopt a statewide plan to address homelessness. This plan should include measurable goals and objectives. Additionally, the committee should monitor the state’s progress towards achieving the goals in the plan.
Full Report -A Performance Audit of Homeless Services
13. Summary of Report 2018-13: A Performance Audit of Employee Evaluation Processes in Higher Education
This audit looked at the employee evaluation processes in higher education in the state of Utah. Institutions in the state have separate processes for staff and faculty evaluations. While most institutions have a policy in place requiring at least a yearly performance review, the percentage of staff evaluated could be improved at most institutions, and the evaluations are not always effectively managing performance. Faculty evaluations could be improved by ensuring they are comprehensive of the faculty member’s performance and behavior, and the Board of Regents should ensure compliance with the board’s policy requiring annual reviews of faculty.