Performance audit and sunset review, Arizona Structural Pest Control Commission

              Debra K. Davenport
Auditor General
Performance Audit and Sunset Review
Arizona Structural Pest
Control Commission
Performance Audit Division
AUGUST • 2007
REPORT NO. 07-05
A REPORT
TO THE
ARIZONA LEGISLATURE
The is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators
and five representatives. Her mission is to provide independent and impartial information and specific recommendations to
improve the operations of state and local government entities. To this end, she provides financial audits and accounting services
to the State and political subdivisions, investigates possible misuse of public monies, and conducts performance audits of
school districts, state agencies, and the programs they administer.
The Joint Legislative Audit Committee
Audit Staff
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.azauditor.gov
Melanie M. Chesney, Director
Dale Chapman, Manager and Contact Person
Robin Hakes
Chris Horton
Pam Niesl
Senator Robert Blendu, Chair Representative John Nelson, Vice-Chair
Senator Carolyn Allen Representative Tom Boone
Senator Pamela Gorman Representative Jack Brown
Senator Richard Miranda Representative Peter Rios
Senator Rebecca Rios Representative Steve Yarbrough
Senator Tim Bee (ex-officio) Representative Jim Weiers (ex-officio)
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
August 7, 2007
Members of the Arizona Legislature
The Honorable Janet Napolitano, Governor
Ms. Debra Runbeck, Chairperson
Arizona Structural Pest Control Commission
Ms. Lisa Gervase, Executive Director
Arizona Structural Pest Control Commission
Transmitted herewith is a report of the Auditor General, a Performance Audit and Sunset
Review of the Arizona Structural Pest Control Commission. This report is in response to the
May 24, 2005, and May 22, 2006, resolutions of the Joint Legislative Audit Committee. The
performance audit was conducted as part of the sunset review process prescribed in
Arizona Revised Statutes §41-2951 et seq. I am also transmitting with this report a copy of
the Report Highlights for this audit to provide a quick summary for your convenience.
As outlined in its response, the Arizona Structural Pest Control Commission agrees with all
of the findings and plans to implement or implement in a different manner all of the
recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on August 8, 2007.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
The Office of the Auditor General has conducted a performance audit and sunset
review of the Arizona Structural Pest Control Commission (Commission) pursuant to
May 24, 2005, and May 22, 2006, resolutions of the Joint Legislative Audit
Committee. This audit was conducted as part of the sunset review process
prescribed in Arizona Revised Statutes (A.R.S.) §41-2951 et seq.
Established in 1988 to replace the Structural Pest Control Board, the Commission’s
purpose is to protect the public from chemical harm and harm resulting from
inadequate or improper structural pest control. Structural pest control includes
controlling public health pests, aquatic pests, household pests, wood-destroying
insects, fungi, and weeds. The Commission’s various responsibilities include issuing
and renewing licenses to pest control businesses and the pesticide applicators and
qualifying parties (persons responsible for supervising, training, and equipping
pesticide applicators) those companies employ, conducting inspections and
complaint and inquiry investigations, and disciplining licensees who commit
violations.
Commission should improve inquiry and complaint
processing (see pages 13 through 21)
While the Commission appropriately investigated most inquiries and complaints
reviewed by auditors, it should ensure all inquiries and complaints are processed
appropriately and in a timely manner. The Commission has the authority to
investigate allegations of wrongdoing through both inquiry and complaint
investigations. Statute defines inquiries as information regarding possible violations
of statute or rules submitted by the public or commission staff. Commission staff
conduct inquiry investigations to initially determine whether the Commission has
jurisdiction over an alleged act, whether an alleged act occurred within the 5 years
preceding the date of the inquiry, and whether a violation occurred. The Commission
has delegated to its staff the authority to determine whether to close and purge an
inquiry with no violations; or take action to remedy minor violations. If commission
staff substantiate a violation of statute or rule and do not remediate the violation
themselves, the violation is forwarded to the Commission for adjudication. Most
public allegations of wrongdoing regarding pest control work begin as inquiries.
Office of the Auditor General
SUMMARY
page i
Commission staff adequately investigated most of the inquiry and complaint cases
reviewed by auditors; however, the Commission needs to improve the timeliness of
these investigations. Specifically:
􀁺􇩉 Inquiry investigations—Auditors’ review of a sample of 44 inquiries received
between January 2004 and September 2006 found that only 15 inquiry
investigations were completed within the Commission’s prescribed 60-day time
frame. The remaining 29 inquiries required between 72 and 399 days to
investigate.
􀁺􇩃 Complaint investigations—While the Commission allows 180 days to
investigate and adjudicate complaints, auditors’ review of a random sample of
19 complaints the Commission received between January 2004 and May 2006
found that only 11 of these complaints were processed within 180 days. The
remaining 8 complaints required between 198 and 364 days to process.
􀁺􇩃 Combined complaint and inquiry investigations—The Commission allows
240 days to investigate and adjudicate cases that begin as inquiries and result
in complaints. However, auditors’ review of 19 inquiries the Commission
received between January 2004 and May 2006 that became complaints found
that only 8 met the 240-day processing time frame. The remaining 11 cases took
between 242 and 609 days to process.
The Commission should take several steps to enhance its investigations’ timeliness.
First, the Commission should establish internal time frames to complete the various
investigation steps and monitor the progress of inquiry and complaint investigations
against these time frames. To assist in monitoring investigations, the Commission
should improve the quality of information in its inquiry and complaint databases by
directing staff to enter investigation information in a timely and accurate manner.
Additionally, the Commission should reduce its time frame for investigating and
adjudicating inquiries that become complaints from 240 days to 180 days. The
Commission should also ensure that it has sufficient staff resources to investigate
inquiries and complaints by reviewing the responsibilities assigned to its investigators
and other staff and prioritizing these responsibilities among its staff accordingly.
Finally, the Commission should improve its handling of inquiries that yield violations
of statute or rule, but do not become formal complaints. Commission investigators
address some violations found during inquiry investigations through education or by
requiring a licensee to come into compliance. However, the Commission should
establish and implement policies regarding which substantiated violations can be
addressed by staff and which should be forwarded to the Commission for
adjudication. Further, the Commission should retain inquiry case files in which the
staff addressed violations, and include in these case files documentation of how staff
addressed the violations and the licensees’ actions to return to compliance.
State of Arizona
page ii
Commission needs to better monitor inspections (see
pages 23 through 31)
To ensure inspections of licensees are appropriately prioritized
and conducted, the Commission needs to better monitor its
inspections. While the Commission has established inspection
goals, it did not meet its goal of conducting at least one use,
vehicle, and office inspection for each licensed pest control
company during the 2-year time period of fiscal years 2005 and
2006. For example, of the 812 pest control companies licensed
during this time, 378 did not receive a use inspection, 324 did
not receive a vehicle inspection, and 138 did not receive any
inspections. However, 5 licensed companies received more
than 50 use inspections each, including tag monitors. One of
these licensed companies received 156 use inspections during
this 2-year time period. The Commission has revised its
inspection plan to better ensure licensees receive necessary
inspections, but it should also improve its monitoring of
inspections. Specifically, the Commission should continually
monitor its inspectors’ activities to ensure that it meets its goal
of conducting at least one use, vehicle, and office inspection
every 2 years, as well as ensuring that inspections are
appropriately distributed among licensees.
To ensure inspections are adequately and consistently performed, the Commission
should improve inspection guidance. The Commission’s inspection procedures
consist of inspection forms, statutes, and rules, but they do not provide sufficient
guidance to inspectors in the field. The Commission has an inspection manual that
details policies and procedures for inspections, but has not provided this manual to
inspectors because of ongoing revisions. Therefore, the Commission should
complete its inspection manual revisions, ensure that its inspectors are fully trained
on inspection policies and procedures, and monitor inspector compliance with these
policies and procedures.
Finally, the Commission should ensure that licensees take corrective action in all
cases where violations are found during inspections. In February 2007, commission
staff established procedures to indicate when on-site, follow-up inspections are
necessary to ensure compliance. According to a commission official, before this
time, the Commission lacked written procedures, but inspectors would visually
confirm corrective action if warranted by the violation. Additionally, the Commission
should establish and implement procedures requiring staff to randomly select
submitted notices of corrective action for verification.
Office of the Auditor General
page iii
Inspection Types:
Use Inspection—Involves inspections to
ensure licensees’ pesticide applications are
proper and safe. Includes tag monitors,
inspections of termite treatment applications
that involve a review of information recorded
on a tag at the application site.
Vehicle Inspection—Involves inspections of
pesticide storage and safety equipment on
vehicles to ensure licensees maintain all
required equipment on vehicles.
Office Inspection—Involves inspections of
office records to ascertain whether the
licensees properly maintain required records.
Source: Structural Pest Control Commission official.
Commission should further improve its information
management systems (see pages 33 through 39)
The Commission should continue improving its information management systems to
more effectively manage the agency and better protect the public. The Commission
maintains several different databases that contain information on licensees, inquiries
and complaints, and inspections, but there are several impediments to using the
databases. For example, some database information is unreliable because of
untimely data entry or inadequate controls, or may be inaccurate. Additionally,
commission management and staff cannot easily access the information they need
to perform their work and provide necessary oversight. Specifically, while the
databases can potentially provide the functionality to create and provide several
reports with useful information to management and staff, for the most part, these
reports have not been created. Finally, database documentation, which explains how
the databases function and can be used, is insufficient.
The Commission initiated efforts to improve its information management systems by
working to obtain funding for additional IT staff and for a consultant to assist with
database documentation. According to the fiscal year 2008 State of Arizona
Appropriations Report, the Commission received authorization to hire an additional IT
staff person and spend $10,000 for a consultant to provide customer service,
maintain IT systems, and create documentation for the existing databases.
Additionally, IT staff have begun assessing management’s need for various
management reports. However, there are only two IT staff members, and other IT
projects have been designated as higher priorities. The Commission should monitor
the progress of these other priorities and determine when resources would become
available to begin developing management reporting capabilities. Additionally, the
Commission should develop and implement policies and procedures for data
handling, including data entry, and for testing the data that resides in the databases.
Finally, the Commission should upgrade its Web site to allow public users to obtain
complaint history information regarding licensed companies and individuals through
the Internet.
State of Arizona
page iv
Office of the Auditor General
TABLE OF CONTENTS
continued
1
13
13
14
15
17
20
23
23
25
27
29
30
33
33
36
38
38
Introduction & Background
Finding 1: Commission should improve inquiry and
complaint processing
Commission conducts both inquiry and complaint investigations
Most inquiries/complaints adequately investigated
Many inquiries/complaints not resolved in timely manner
Commission can better handle substantiated violations
Recommendations
Finding 2: Commission needs to better monitor
inspections
Commission has not met inspection goals
Commission should improve monitoring to meet revised
inspection plan and goals
Commission should further improve inspection guidance
Commission should ensure licensees correct inspection violations
Recommendations
Finding 3: Commission should further improve its
information management systems
Inadequate information management creates difficulties
Commission should further improve information management
Database improvements will improve public assistance
Recommendations
page v
State of Arizona
TABLE OF CONTENTS
Sunset Factors
Agency Response
Tables:
1 Licensing Requirements
2 Schedule of Revenues, Expenditures, and Changes in Fund
Balances
Fiscal Years 2005 through 2007
(Unaudited)
3 Number of License Applications Processed
Within Time Frames
From January 2004 through June 2006
41
3
8
42
concluded
page vi
The Office of the Auditor General has conducted a performance audit and sunset
review of the Arizona Structural Pest Control Commission (Commission) pursuant to
May 24, 2005, and May 22, 2006, resolutions of the Joint Legislative Audit
Committee. This audit was conducted as part of the sunset review process
prescribed in Arizona Revised Statutes (A.R.S.) §41-2951 et seq.
Purpose and responsibilities
Established in 1988 to replace the Structural Pest Control Board, the Structural Pest
Control Commission’s purpose is to protect the public from chemical harm and harm
resulting from inadequate or improper structural pest control. Structural pest control
includes controlling public health pests, aquatic pests, household pests, wood-destroying
insects, fungi, and weeds. The Commission does not regulate pesticide
applications used directly in the commercial production of crops and animals. This
is regulated by the Arizona Department of Agriculture.
The Commission’s mission is:
To advocate and promote, through education, training, and enforcement, the safe
application of pest control technologies which will result in the maximization of the
health and safety of the residents of Arizona, and protection of their property and the
environment.
The Commission has various responsibilities, including:
􀁺􇩉 Issuing and renewing licenses to pest control businesses and the pesticide
applicators and qualifying parties those companies employ;
􀁺􇩃 Conducting investigations and hearings concerning potential violations of
statute or administrative rule;
􀁺􇩄 Disciplining licensees that have committed violations; and
􀁺􇩉 Inspecting pest control companies to protect the public from harm resulting
from improper pest control.
Office of the Auditor General
INTRODUCTION
& BACKGROUND
page 1
By performing these functions, the Commission also meets its responsibility under
the provisions of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA),
which grants states the primary responsibility for enforcing pesticide regulation.
In addition to the activities listed above, statute also requires that each time a pest
control company inspects or treats a structure for termites it must submit a Termite
Action Registration Form (TARF) and a filing fee to the Commission within 30 days.
Statute requires the form to include information on the termite inspection or
treatment, including the name of the business performing the work and the type and
date of the work performed. The information from these forms is maintained in a
database, which is made available to the public upon request.
Licensing
As required by statute, the Commission issues
licenses to businesses, applicators, and qualifying
parties. As of January 10, 2007, the Commission
reported that there were 1,006 licensed businesses,
6,995 licensed applicators, and 1,217 licensed
qualifying parties in Arizona. In 2006, the Commission
reported approving 2,859 applicator and 178
qualifying party applications, and issuing 80 business
licenses.
Table 1 (see page 3) illustrates each group’s statutory
licensing requirements. Applicators and qualifying
parties are licensed in various categories, including
general pest control, control of wood-destroying
insects, fumigation, wood-destroying insect
inspection, and aquatic pest control. Additionally,
statute states that any individual working for a licensed
business has 90 days from the date of employment to
obtain an applicator license in all appropriate
categories. The Commission and its staff have a total
of 130 days to review and approve the application.
Licensees must renew their licenses annually by
submitting a form prescribed by the Commission and
paying the prescribed fee (see Table 1, page 3). In
addition to paying these fees, applicators and
qualifying parties must submit proof of 6 hours of
continuing education from the previous 13-month
period for each of their licensing categories.
State of Arizona
page 2
Business License—Entitles the licensed person or entity and
that person’s or entities’ employees to engage in the business
of structural pest control.
Licensed Applicator—A person who applies pesticides and
conducts wood-destroying insect and fungi inspections.
Qualifying Party—A person responsible for supervising
training, and equipping pest control business applicators.
Source: Auditor General staff analysis of A.R.S. §32-2301 and information provided
by a commission official.
Wood-Destroying Insect Control—Control and prevention of
wood-destroying insects.
Right-of-Way and Weed Control—Control of terrestrial weeds
around structures in nonagricultural areas.
Fumigation—Use of fumigants as a method of pest control.
Turf and Ornamental—Control of plant pests and diseases, and
the use of plant growth regulators on plantings and turf in
nonagricultural areas.
Fungi—Inspection to identify existence or absence of fungi.
Wood-Destroying Insect Inspection—Inspection to identify
existence or absence of wood-destroying insects.
Aquatic Pest—Pests in water bodies.
General and Public Health Pest Control—Pest control in and
about households or structures other than the above categories.
Source: Auditor General staff analysis of the Commissioner’s report License Category
Definitions and Conversion Chart.
According to statute, the Commission must also oversee and approve continuing
education programs. Specifically, A.R.S. §32-2319 requires licensees to verify
attendance at programs of instruction that are overseen and approved by the
Commission. Administrative rule R4-29-216 further specifies that only continuing
education approved by the Commission may be used to satisfy continuing education
requirements and indicates what continuing education programs must address to
receive approval. Through its Web site, the Commission provides a continuing
education provider application packet, provider requirements for approval, and
guidance for completing the application materials. Additionally, according to a
commission official, commission staff periodically attend continuing education
courses to help ensure course content is consistent with state pesticide laws and
regulations.
Office of the Auditor General
page 3
Table 1: Licensing Requirements
Type of License Applicator Qualifying Party Business
Pass core and category
exams with scores of at
least 75 percent
Pay $30 licensing fee
and an additional $48
for each test category
Possess an applicator license
Within the 5 years prior to
application, must have 3,000
verifiable hours of practical
experience in the structural
pest control business or 2,000
hours of practical experience
and 12 semester hours of
education or its equivalent in
subjects directly related to each
category for which the person
is applying
Pass fingerprint and
background checks
Pass core and category exams
with scores of at least 75
percent
Obtain commission approval
Pay licensing fee of $150 and
an additional $48 for each test
category
Provide proof of financial
responsibility, such as a deposit of
money, liability insurance, or a
surety bond
Identify an active, licensed,
qualifying party
Hold a trade name filed with the
Arizona Secretary of State’s Office
or be incorporated by the Arizona
Corporation Commission
Complete a license application
supplement including ownership
status; Limited Liability Corporation
applicants must provide articles of
organization or incorporation
Obtain commission approval
Pay $75 licensing fee and an
additional $35 for each branch
registered
Initial
Annual Renewal Submit proof of 6
continuing education
credits in the previous
13 months
Pay $25 licensing fee if
applying in paper or $20
if applying online
Submit proof of 6 continuing
education credits in the
previous 13 months
Pay $125 licensing fee if
applying on paper or $120 if
applying online
Pay $75 licensing fee if applying on
paper or $70 if applying online and
an additional $35 for each branch
registered
Source: Auditor General staff analysis of A.R.S. §§32-2312 through 32-2314; Arizona Administrative Code R4-29-105, 204-207, and
215; commission licensing application packets; and Metro Institutes’ Web site, the company contracted to provide testing for
the Commission’s licensees.
Inquiry and complaint resolution
According to statute, the Commission must investigate all potential violations of state
law (called “inquiries”) and all complaints against licensees received within 5 years
of the alleged act. A.R.S. §32-2321 lists 16 actions that constitute statutory violations
that are grounds for disciplinary action. These various actions include making
falsified or fraudulent records/reports or not providing these reports within 3 business
days of a request by the property owner, the owner’s agent, or a commission
representative, misrepresenting a material fact in obtaining a license, and misusing
various pesticides, such as applying pesticides in a manner that is inconsistent with
the pesticide label requirements or that may cause undue harm to the public. A
felony or misdemeanor conviction arising from or in connection with a pest control
license issued by the Commission is also considered a violation.
Inquiries and complaints are generated by the public, other pest control companies,
and commission staff. A.R.S. §32-2304 allows the Commission to conduct an inquiry
into an alleged violation before opening a formal complaint, and A.R.S. §32-2301
defines an inquiry as information from the public or commission staff of possible
violations of statute. The Commission’s staff conduct inquiry investigations to initially
determine whether the Commission has jurisdiction over an alleged act, whether an
alleged act occurred within the 5 years preceding the date of the inquiry, and whether
a violation has occurred. If a minor violation of statute or administrative rule is found,
commission staff can take action to remedy it as long as there is no direct or
immediate effect on public safety, health, or property damage. However, if
commission staff either substantiates or potentially substantiates a violation during
an inquiry investigation that is not minor in nature, staff initiates a formal complaint,
and the work performed during the inquiry investigation becomes part of the
complaint investigation. However, if the inquiry investigation reveals that the
allegation is outside the Commission’s jurisdiction, beyond the 5-year statutory
limitation, or unsubstantiated, the inquiry is closed. The Commission’s goal is to
process inquiries within 60 days and complaints within 180 days. According to the
Commission’s inquiry and complaint databases, the Commission opened 176
inquiries and 72 complaints in 2006.1
When violations are substantiated, statute permits the Commission to either enter
into a settlement agreement with the licensee or send the case to hearing at the
Office of Administrative Hearings (OAH). If the licensee rejects the proposed
settlement, the Commission has the option of sending the case to administrative
hearing, or returning it to settlement conference, or dismissing it. If the Commission
imposes discipline, either through a formal hearing or settlement agreement, it can
use one or more of the following options:
1 Auditors’ review of the complaint database revealed that insufficient controls were in place to establish the reliability of
the database for any information other than general background information. According to a commission official, the
database was not intended to be used for more than this.
State of Arizona
page 4
In 2006, the Commission
opened 176 inquiries
and 72 complaints.
􀁺􇩒 Revoke, suspend, or refuse to renew a license;
􀁺􇩉 Impose a probation that requires licensees to comply
with one or more specific provisions and requires
reporting by or monitoring of the licensees;
􀁺􇩉 Impose a civil penalty in an amount of not more than
$1,000 for each violation; or
􀁺􇩉 Issue advisory notices for minor violations, known as de
minimis violations.
Additionally, the Commission can issue cease-and-desist
orders to unlicensed structural pest control businesses.
For complaint cases sent to administrative hearing, the
Commission can accept, reject, or modify the administrative
law judge’s findings, conclusions, and recommended order at
a public meeting. The Commission reported entering into 59
settlement agreements in calendar year 2006.
Inspections
As authorized by state law, the Commission inspects pest control companies to
protect the public from harm resulting from improper pest control. There are three
primary types of inspections: office, use, and vehicle. According to a commission
official, office inspections include verifying that licensed pest control companies
properly maintain required records, use inspections verify proper and safe pesticide
applications, and vehicle inspections include verifying that the chemical storage and
safety equipment on vehicles is maintained. The Commission reported that 2,247
inspections were conducted in calendar year 2006.
Additionally, the Commission conducts use inspections as established in a
cooperative agreement with the United States Environmental Protection Agency
(EPA).1 This agreement required the Commission to conduct the following
inspections for federal fiscal year 2006: 10 wood-destroying insect pesticide
applications at any location, 10 pesticide applications at schools, 10 pesticide
applications at food establishments, 10 pesticide applications at healthcare facilities,
20 pesticide applications at golf courses and aquatic areas, and 20 other pesticide
applications.2
1 The Commission has a cooperative agreement with the EPA in which it agrees to monitor specialized locations for
pesticide use violations. The EPA reimburses the Commission for these inspection costs.
2 Other pesticide applications include inspections of applications in other license categories, such as Turf and Ornamental,
General Pest, and Fumigation.
Office of the Auditor General
page 5
In 2006, the Commission
reported conducting
2,247 inspections.
26 Licenses revoked
21 Licenses suspended
5 Licensees placed on probation
66 Civil penalties
92 Administrative warnings
7 Cease-and-desist orders
issued
29 Other actions such as ordering
continuing education, reporting
to the Commission, or
extending service warranties.
Source: Pesticide Enforcement and Applicator Certification
Cooperative Agreement Accomplishment Report filed
with the Environmental Protection Agency by the
Commission for the period October 1, 2005 through
September 30, 2006.
Organization and staffing
The Commission comprises seven members who the Governor appoints for no more
than two consecutive 3-year terms. The Governor is required to appoint three
industry members with a minimum of 5 years of structural pest control experience.
Additionally, statute requires industry members to have a combination of experience
in all of the licensing categories and represent large and small companies in both
urban and rural areas. Likewise, at least one of the three industry members must
have an active business license with five or fewer employees. The Governor is also
required to appoint three public members who have had no involvement with the
structural pest control industry for at least 5 years. Finally, one appointee must be an
entomologist, plant pathologist, toxicologist, medical doctor, osteopathic doctor, or
individual with a public health or occupational health degree and have at least a
baccalaureate degree. As of June 22, 2007, the Commission was composed of:
􀁺􇩔 Two industry members;
􀁺􇩏 One entomologist;
􀁺􇩔 Two public members who are attorneys;
􀁺􇩏 One public member who is a retired administrator of a state-wide Arizona pest
control association; and
􀁺􇩏 One vacancy.
For fiscal year 2007, the Legislature authorized a total of 35 full-time equivalents
(FTEs) for the Commission. As of July 2007, the Commission reported having a total
of 32 staff, with 3 vacancies. In addition to an executive director, the Commission has
an assistant director responsible for overseeing licensing, compliance, and
enforcement operations; and an administrative services officer responsible for
administrative and financial operations. The Commission also has 2 information
technology specialists and 4 administrative or financial specialists. The remainder of
the commission staff includes 4 licensing staff, 11 inspection and investigation staff,
2 inspection and investigation supervisors, 2 project specialists, 1 inspector of the
day/public information officer, and 3 regulatory compliance staff.
Followup to 1996 performance audit and sunset review
The Office of the Auditor General previously performed a performance audit and
sunset review of the Commission in 1996 (see Report No. 96-18). During this current
performance audit and sunset review, auditors followed up on two issues raised in
the prior report:
State of Arizona
page 6
􀁺􇩃 Commission can improve inspection program—The 1996 audit found that
the Commission did not conduct regular inspections of pest control companies.
The lack of written time frames for inspections, ineffective and inaccurate
inspection tracking system, and insufficient supervisory oversight contributed to
the Commission’s inability to inspect many pest control companies. Additionally,
the Commission’s computer system could not determine which companies had
been inspected or were due for an inspection. During the current audit, auditors
determined that the Commission still needs to take steps to better monitor
inspections of pest control companies to ensure inspections are appropriately
prioritized and conducted (see Finding 2, pages 23 through 31).
􀁺􇩃 Commission can improve collection of termite action report form (TARF)
fees and information—The 1996 audit found that the Commission did not
ensure that pest control companies properly filed TARFs and made few efforts
to monitor the information’s accuracy or completeness on TARFs that were filed.
The audit determined that TARFs provided important information to both the
public and pest control companies, and that their associated fees provided the
Commission with significant revenue. During the current audit, auditors found
that the Commission has established procedures for filing TARFs (see Sunset
Factors, page 43).
Budget
The Legislature appropriates monies to the Commission from the Structural Pest
Control Commission Fund annually. The Fund contains revenues derived principally
from licensing fees and charges for services, such as TARF filing fees. The
Commission deposits 90 percent of its fees, including charges for services, into the
Fund and remits the remaining 10 percent to the State General Fund. The
Commission deposits all monies from civil penalties into the State General Fund.
Table 2 (see page 8) illustrates the Commission’s actual revenues and expenditures
for fiscal years 2005 and 2006 and estimated revenues and expenditures for fiscal
year 2007. As shown in Table 2, the Commission received nearly $3.4 million in
revenues in fiscal year 2006 and will receive an estimated $2.3 million in revenues in
fiscal year 2007. This represents a 31.1 percent decrease in revenues. According to
a commission official, this can be attributed to declining new home construction,
resulting in reduced revenue from TARF filing fees, as the need for termite pre-treatment
services diminished. While commission expenditures totaled more than
$2.1 million in fiscal year 2006, estimated expenditures increased to $2.4 million in
fiscal year 2007. Approximately 60 percent of the increase, or $197,600, was due to
the Commission’s share of salary and employee-related expenditure increases for
state employees. An additional $100,000 in expenditures is for two FTEs to enforce
a law that provides schools and childcare facilities with advance notice of pesticide
applications on their premises. The Commission estimated an approximate $2.86
Office of the Auditor General
page 7
State of Arizona
page 8
Table 2: Schedule of Revenues, Expenditures, and Changes in Fund Balances
Fiscal Years 2005 through 2007
(Unaudited)
2005 2006 2007
(Actual) (Actual) (Estimate)
Revenues:1
Charges for services $2,192,918 $2,532,059 $1,842,400
Licenses, permits, and fees2 524,518 624,223 339,500
Federal grants 140,222 150,161 109,500
Fines, forfeits, and penalties 103,955 69,835 40,000
Other 9,822
Total revenues 2,961,613 3,386,100 2,331,400
Expenditures:3
Personal services and employee-related 1,370,442 1,519,932 1,838,450
Professional and outside services 96,635 161,382 128,641
Travel 160,838 127,397 117,837
Other operating 321,966 282,455 310,249
Equipment 82,714 18,169 41,534
Total expenditures 2,032,595 2,109,335 2,436,711
Excess (deficiency) of revenues over expenditures 929,018 1,276,765 (105,311)
Other financing uses:
Operating transfers out 13,574 7,244 6,000
Remittances to the State General Fund4 406,458 416,344 259,240
Total other financing uses 420,032 423,588 265,240
Excess (deficiency) of revenues over expenditures and other financing uses 508,986 853,177 (370,551)
Fund balance, beginning of year 1,870,685 2,379,671 3,232,848
Fund balance, end of year $2,379,671 $3,232,848 $2,862,297
1 The Commission anticipates that total 2007 revenues will decrease by approximately 30 percent due to a decline in the housing
market.
2 License, permit, and fee revenues are reported net of fees paid to the credit card processor of approximately $6,000 and $10,500 in
2006 and 2007, respectively. Beginning in 2006, the Commission began accepting payment online using credit cards and incurs fees
for credit card processing. The Commission anticipates that these fees will continue to increase as more payments are made online.
3 Administrative adjustments are included in the fiscal year paid.
4 As required by A.R.S. §32-2305, the Commission remits 10 percent of fees and 100 percent of all collected civil penalties to the State
General Fund.
Source: Auditor General staff analysis of the Arizona Financial Information System (AFIS) Revenues and Expenditures by Fund,
Program, and Organization and Trial Balance by Fund reports for fiscal years 2005 and 2006; and commission-provided
estimates for fiscal year 2007.
million fund balance at the end of fiscal year 2007. Despite this balance, the
Commission cannot hire additional staff outside of the 35 FTEs authorized by the
Legislature for fiscal year 2007.
Scope and methodology
This performance audit and sunset review focused on the Structural Pest Control
Commission’s inquiry and complaint investigation processes, its approach and
processes for inspecting licensed pest control companies, and the management
and use of its databases, which contain critical information on inquiries, complaints,
licensing, and inspections. The Commission’s performance was also analyzed in
accordance with the 12 statutory sunset factors. This report includes findings and
recommendations in the following areas:
􀁺􇩗 While the Commission appropriately investigated most of the inquiries and
complaints reviewed by auditors, it should improve the timely processing of
inquiries and complaints, and better handle substantiated inquiries;
􀁺􇩗 While the Commission has revised its approach and process for conducting
inspections of licensed pest control companies, it needs to ensure that these
changes are implemented and improve its monitoring of these inspections; and
􀁺􇩔 The Commission should continue improving its information management
systems, including the use of its databases, and further ensure the database
information’s reliability and accessibility.
Auditors used various methods to study the issues addressed in this report. These
methods included interviewing commission members, the Commission’s Executive
Director, commission staff, the Commission’s Attorney General representative, an
official from the United States Environmental Protection Agency, and representatives
from Arizona stakeholders industry groups; attending commission meetings; and
reviewing statutes, rules, and commission procedures.
Additionally, the Commission maintains multiple databases, including separate
databases for inquiries, complaints, licensing, and inspections. Auditors attempted
to validate information in these databases for use and analysis during the audit. For
each of these databases, auditors determined the following:
􀁺􇩃 Complaint database—Auditors’ review of the complaint database controls
determined they were not adequate. For example, according to a commission
official, database information that predates mid-2004 is not reliable due to
factors such as giving multiple people, including temporary employees, the
Office of the Auditor General
page 9
The Commission’s
estimated fund balance
at the end of fiscal year
2007 is $2.86 million.
ability to enter data, and not cross-checking the data entered into the database
against complaint case files. Additionally, although commission officials report
that database access has been limited and data entry cross-checked since mid-
2004, data entry has not been standardized for information such as company
names and allegations, resulting in inconsistent information in the database,
and some information is missing, such as when the complaint investigation was
completed. As a result, auditors decided to use information from this database
to report only on general background information.
􀁺􇩉 Inquiry database—Auditors requested and received a download of the inquiry
database in September 2006 to conduct validation test work. Test work involved
determining the completeness, accuracy, and reliability of three fields (closure
date, inquiry number, and receive date) necessary to assess the timeliness of 77
open inquiries as reported in the database. Specifically, auditors compared the
inquiry received date and number contained in 23 open and closed inquiry case
files to the database. This information from the 23 files was accurately reflected
in the database, except for 1 received date that was off by 1 day in the database.
Based on the reliability of the inquiry number and received date, auditors
decided to use the database to report on the number of inquiries opened by the
Commission. After September 2006, commission staff entered a closure date
for several of the open inquiries in the database. Therefore, auditors conducted
further test work on the 77 inquiries. For these 77 cases, commission staff
located 62 case files. Auditors compared closure date information in the 62 case
files to the database. Based on this review, auditors found that the case closure
dates in the database were inaccurate for 21 of the 62 inquiries, while 6 of the
case files contained closure dates that were not recorded in the database.
Further, auditors could not confirm the database closure dates for 15 inquiry
case files that could not be located.1 As a result, auditors decided to use
information from this database only to report on the number of inquiries
received.
􀁺􇩌 Licensing database—Auditors’ control work suggested that basic controls
were in place for the licensing database. Therefore, auditors requested and
received a download of this database in September 2006 to conduct validation
test work. This test work involved comparing information in the licensing files for
a random sample of 30 licensees licensed between July 1, 2004 and June 30,
2006, and a random sample of 26 licensees that were either not licensed for this
full time period or were inactive for reasons such as a suspended license or the
company being closed. Based on this work, auditors decided to use information
from this database.
􀁺􇩉 Inspections database—Auditors’ control work suggested that basic controls
were in place for the inspections database. Therefore, auditors requested and
State of Arizona
page 10
1 Some of these 15 case files may have been purged, as allowed by statute, but auditors cannot confirm how many had
been purged.
received a download of this database in September 2006 to conduct validation
test work. This test work involved comparing information in the inspection files
for all the inspections performed for a random sample of 30 pest control
companies to information in the inspections database download. Auditors
determined that when information from inspection forms was entered into the
database, it was entered accurately. Auditors decided to use information from
this database even though they could not verify the accuracy of 7 of the 66
vehicle and office inspections sampled and 7 of the 58 use inspections sampled
because of missing inspection forms and identified 1 office inspection form and
2 use inspection forms that had not been entered into the database. Auditors
determined that the amount of missing data was not material to their
conclusions.
In addition, the following specific methods were used:
􀁺􇩔 To assess the timeliness and adequacy of both inquiry and complaint
investigations, auditors reviewed and conducted analyses of the following:
􀁼􇱁 A random sample of 19 of the 104 inquiries that resulted in complaints the
Commission received between January 1, 2004 and June 30, 2006; and
􀁼􇱁 A random sample of 25 of the 131 closed inquiry cases the Commission
received between September 22, 2004 and September 27, 2006.
􀁺􇩔 To assess the Commission’s process for prioritizing and conducting inspections
of licensed pest control companies, auditors reviewed and analyzed data from
the Commission’s licensing and inspection databases, which contain
information about the number of licensed pest control companies and
inspections the Commission performed; reviewed the Commission’s Neutral
Inspection Scheme, which establishes the inspection priorities for licensees;
and reviewed the revised inspection approach for prioritizing additional
inspections developed during the audit, the inspector’s manual, and inspection
forms. In addition, auditors contacted an official with the Association of
Structural Pest Control Regulatory Officials.
􀁺􇩔 To develop information regarding the Commission’s information management,
auditors reviewed the Commission’s various databases, the progress of its
database integration efforts, and other IT projects with the Commission’s IT
Director and staff. Auditors also reviewed the Commission’s fiscal year 2008 and
2009 budget request and JLBC’s recommendations regarding that request.
Finally, to determine what information was available to the public regarding
complaints against licensees, auditors reviewed the Commission’s Web site and
made two phone calls to the commission offices requesting complaint history
information.
Office of the Auditor General
page 11
􀁺􇩔 To develop information for the Introduction and Background, auditors reviewed
the Auditor General’s 1996 performance audit and sunset review of the
Commission (see Report No. 96-18) and gathered and analyzed unaudited
information about the Commission from the Arizona Financial Information
System (AFIS) Revenues and Expenditures by Fund, Program, and Organization
and Trial Balance by Fund reports for fiscal years 2005 and 2006, the fiscal year
2007 State of Arizona Appropriations Report for the Commission, information
from various commission databases, information from the Commission on the
number of FTEs, and other agency documents.
This audit was conducted in accordance with government auditing standards.
The Auditor General and staff express appreciation to the commission members,
Executive Director, and their staff for their cooperation and assistance throughout the
audit.
State of Arizona
page 12
Commission should improve inquiry and
complaint processing
While the Commission appropriately investigated most inquiries and complaints
auditors reviewed, it should take steps to ensure the timely and appropriate
processing of all inquiries and complaints. Statute authorizes the Commission to
investigate allegations of wrongdoing through both inquiries and complaints.
Auditors’ review of a random sample of 44 inquiries and complaints found that most
were adequately investigated. However, the Commission did not meet its established
time frames for more than half of the inquiries and complaints auditors reviewed and
should take steps to improve these investigations’ timeliness. Additionally, the
Commission can improve its handling of substantiated inquiries by establishing
policies regarding which substantiated violations it should address versus those that
staff can remedy, as well as ensuring its staff document the action taken and retain
a record of the inquiry.
Commission conducts both inquiry and complaint
investigations
The Commission has the authority to investigate allegations of wrongdoing through
both inquiry and complaint investigations. A.R.S. §32-2304 authorizes the
Commission to receive and appropriately handle inquiries, which statute defines as
information regarding possible violations of statute or rules submitted by the public
or commission staff. As such, commission staff conduct inquiry investigations to
initially determine whether the Commission has jurisdiction over an alleged act,
whether an alleged act occurred within the 5 years preceding the date of the inquiry,
and whether a violation has occurred. These investigations typically involve interviews
with the complainant, licensee, and other witnesses; a review of pertinent
documentation (such as treatment records or pesticide label requirements); and
potentially, an inspection of the licensee. Consistent with statute, if the allegation of a
Office of the Auditor General
FINDING 1
page 13
violation cannot be substantiated during the inquiry investigation, the case is closed
and not reported to the public, and the inquiry is purged/destroyed 6 months after
closing. The Commission has delegated to its staff the authority to determine whether
to close and purge an inquiry with no violations, or take action to remedy minor
violations that have no direct or immediate effects on public safety, health, or property
damage. Most public allegations of wrongdoing regarding pest control work begin
as inquiries, and according to the Commission’s inquiry database, the Commission
opened 176 inquiry cases during calendar year 2006.
If commission staff either substantiate or partially substantiate a violation of statute
during their inquiry investigation that is not minor in nature, the inquiry case then
becomes a complaint. Once an inquiry becomes a complaint, commission staff send
a notice of complaint to the licensee, obtain the licensee’s written response, and
complete any additional necessary investigative steps before forwarding the
complaint to the Commission for consideration and adjudication. The Commission
adjudicates the complaint, either by dismissing the complaint or by taking any
number of disciplinary actions authorized by statute either through a settlement
agreement or formal hearing. In some cases, an allegation of wrongdoing will begin
as a complaint rather than an inquiry. For example, if a commission inspector finds
evidence of a potential violation during an inspection of a licensee, a complaint could
be opened. According to the Commission’s complaint database, the Commission
opened 72 complaints in calendar year 2006.1
Most inquiries/complaints adequately investigated
Commission staff adequately investigated most of the complaints auditors reviewed.
Auditors reviewed a random sample of 44 inquiries and complaints the Commission
received between January 2004 and September 2006 and determined that 42 of
these inquiries and complaints were adequately investigated.2 For these inquiries
and complaints, commission staff typically performed a variety of investigative steps,
such as interviewing the complainant, licensee, or other witnesses; collecting
sufficient evidence/documentation; and writing a detailed investigative report. In
addition, the appropriate supervisors reviewed the investigations. Auditors
determined that two cases could have benefited from additional investigation to
better support commission staff’s decision to close these cases. Specifically, in one
case, investigators made only one attempt to contact a key witness before closing
the case. In the other case, the inspection report did not clearly indicate that some
important information was collected, such as whether the applicator’s personal
protection equipment was used. The Commission has established investigation
checklists and supervisory reviews, which staff followed for the 42 cases and which
help ensure that staff conduct adequate investigations.
1 Auditors’ review of this database revealed that insufficient controls were in place to establish the reliability of the database
for any information other than general background information.
2 These 44 cases consisted of a random sample of 25 closed inquiries the Commission received between September 22,
2004 and September 27, 2006, and a random sample of 19 inquiries that resulted in complaints the Commission received
between January 1, 2004 and May 24, 2006.
State of Arizona
page 14
Inquiries that are not
substantiated can be
destroyed 6 months after
they are closed.
Many inquiries/complaints not resolved in timely manner
Although the Commission has established time frames to process inquiries and
complaints, it does not consistently meet them. Specifically, more than half of the
cases auditors reviewed for timeliness were not processed within the Commission’s
established time frames. As a result, the Commission should take several steps to
improve investigation timeliness, including establishing internal time frames for each
investigative step, adopting a 180-day standard to investigate and adjudicate
inquiries that become complaints, monitoring the progress of inquiry and complaint
investigations, and reviewing its investigators’ additional responsibilities.
Commission consistently missed established time frames for
handling inquiries and complaints—Although the Commission has
established time frames for inquiry and complaint investigations, many cases
auditors reviewed were not processed according to these time frames.
Specifically:
􀁺􇩁 Approximately one-third of inquiry investigations conducted in a timely
manner—The Commission requires inquiry investigations to be completed
within 60 days. However, auditors’ review of 44 inquiries received between
January 2003 and September 2006 found that only 15 inquiry investigations
were completed within 60 days.1 The remaining 29 inquiries required between
72 and 399 days to investigate, including 3 inquiries that took more than 1 year
to investigate.
􀁺􇩓 Slightly more than one-half of complaints processed in a timely manner—
The Commission allows 180 days to investigate and adjudicate complaints.
Auditors reviewed 19 randomly selected complaint files the Commission
received between January 2004 and May 2006. For these 19 complaints, 11
were processed within 180 days, while the remaining 8 complaints required
between 198 and 364 days to process.
􀁺􇩌 Less than one-half of the combined inquiries and complaints processed in
a timely manner—The Commission allows 240 days to investigate and
adjudicate cases that begin as inquiries and result in complaints. Based on
auditors’ review of 19 inquiries the Commission received between January 2004
and May 2006 that became complaints, only 8 met the 240-day processing time
frame. The remaining 11 cases took between 242 and 609 days to process.
Untimely inquiry and/or complaint investigations affect the Commission’s ability to
protect the public. For example, although the Commission can issue a corrective
work order while the investigation is ongoing, it cannot take disciplinary action
against pest control workers or companies until the investigation is complete.
1 The 44 inquiries auditors reviewed consisted of a random sample of 25 of the 131 closed inquiry cases the Commission
received between September 22, 2004 and September 27, 2006, and a random sample of 19 of the 104 inquiries that
resulted in complaints the Commission received between January 1, 2004 and May 24, 2006.
Office of the Auditor General
page 15
Only 15 of 44 inquiries
reviewed were
investigated within the
prescribed time frame.
Eleven of 19 complaints
reviewed were
processed within the
prescribed time frame.
Eight of 19 combined
inquiry and complaint
investigations reviewed
were processed within
the prescribed time
frame.
Commission should take steps to conduct investigations in a more
timely manner—Auditors identified several steps the Commission should take
to conduct inquiry and complaint investigations in a more timely manner:
􀁺􇩅 Establish internal time frames for investigation processes—Although the
Commission has established the basic steps for investigating an inquiry or
complaint, it has not established internal time frames for completing each of
these steps. Creating time frames to complete each of the different phases of
the process could help the Commission ensure that cases are not unattended
for extended periods of time. For example, auditors’ review of 7 of the 19
randomly selected inquiries that became complaints the Commission received
between January 2004 and May 2006 found significant and unexplained lapses
in activity during the investigation process for 2 of the 7 cases. These 2 cases
had a total of 3 unexplained lapses in the case files, which ranged from 135 days
to 156 days. Investigative time frames can also help the Commission assess
where bottlenecks in the investigation process may occur and then take
necessary action to address those bottlenecks. Thus, the Commission should
establish specific time frames for each phase of its investigative process.
􀁺􇩃 Commission should revise its time frames—As previously mentioned, the
Commission has established a 240-day time frame to process its investigations
that begin as inquiries and end in complaints. However, the Commission should
ensure that the number of days from inquiry receipt to complaint adjudication is
no longer than 180 days, which is a reasonable amount of time to investigate
and adjudicate these cases. Based on auditors’ review of the 19 inquiries that
became complaints the Commission received between January 2004 and May
2006, the inquiry portions of 14 of these investigations were sufficiently thorough
to substantiate the violations. During the complaint portion of investigation,
inspectors were required only to mail an official notice of complaint, receive the
licensee’s written response, and if necessary, document one or two other
investigative items. Despite conducting most of the investigation during the
inquiry phase for these 14 complaints, only 5 were investigated and adjudicated
within 180 days.
􀁺􇩍 Monitor inquiry and complaint investigation progress—Once the
Commission establishes time frames, it should improve its management of its
complaint and inquiry databases to better monitor the progress of investigations
against these time frames. As previously mentioned, auditors’ review and tests
of these databases found some information to be potentially unreliable and
inaccurate. For example, many inquiries were fully investigated, the case files
closed, and in some cases purged, before all inquiry case file information was
entered into the inquiry database. Additionally, according to a commission
official, some of the information for complaint cases is not entered until after the
Commission has completed the investigation and adjudicated the case. As
such, these databases cannot be used to track the progress of inquiry and
complaint investigations.
State of Arizona
page 16
The Commission should
adopt a 180-day time
frame to investigate and
adjudicate complaints.
The Commission’s
inquiry and complaints
databases contain
potentially unreliable and
inaccurate information.
Therefore, the Commission should develop and implement procedures that
direct staff to enter information from inquiry/complaint investigative activities in a
timely and accurate manner and verify the information’s accuracy. To assist staff
in consistently entering necessary data, the Commission should add fields to
the existing data entry form for key investigative activities, such as documenting
the date the inspector receives documentation, interviews a client, performs an
inspection, or collects samples, as well as other important dates such as when
supervisors review the investigative reports. Once the Commission has
established these procedures, the Commission’s Executive Director should
generate and review monthly management reports that track the progress of
inquiry and complaint investigations and ensure that the internal time frames of
the investigative processes are met. (See Finding 3, pages 33 through 39, for
additional information regarding information management.)
􀁺􇩃 Commission should assess staff responsibilities—The additional
responsibilities that have been assigned to investigators may contribute to the
untimely investigations. Specifically, investigative staff are also responsible for
performing inspections of licensees. Inspection activities require significant
investigator time as the Commission reported performing nearly 2,250
inspections during fiscal year 2006. According to a commission official,
investigators spend an estimated 45 percent of their time conducting
inspections.
To help ensure that it investigates inquiries and complaints in a timely manner,
the Commission should ensure that it has sufficient staff resources to investigate
complaints by reviewing the responsibilities assigned to its staff and prioritizing
these responsibilities accordingly. After the Commission assesses its needs, it
should determine whether it can meet its investigation and inspection
responsibilities with existing staff or by taking other steps. If not, as appropriate,
the Commission should seek legislative approval for additional staff. The
Commission would have the funding capacity to hire additional staff as it
estimates it will have a $2.86 million balance in its Fund as of June 30, 2007.
Commission can better handle substantiated violations
In addition to investigating inquiries and complaints in a more timely manner, the
Commission should improve its handling of inquiries that yield violations of statute or
rule, but do not become formal complaints. Commission staff address some
violations identified during inquiry investigations through education and/or by
requiring a licensee to come into compliance. However, the Commission has not
established policies regarding the types of violations that can be handled in this
manner, nor has it ensured that its staff document their actions.
Office of the Auditor General
page 17
Some substantiated violations are handled informally—Commission
practice directs that upon completing the inquiry investigation, the Inspector
Supervisor(s) and Assistant Director of Enforcement and Compliance review
the completed inquiry investigation and determine whether to close the inquiry,
send the inquiry to the Commission as a complaint, or remediate de minimis
violations through education and compliance.
Auditors reviewed a random sample of 25 closed inquiry cases the Commission
received between September 2004 and September 2006 and found that 5 cases
were closed despite commission staff substantiating at least one of the indicated
allegations. As allowed by law, instead of sending the substantiated violation to the
Commission, staff addressed the violations through education and/or by requiring
the licensee to come into compliance. For example, for an inquiry the Commission
received in September 2005, an apartment complex employee had engaged in the
unlicensed application of pesticide. According to a commission official, staff
educated those involved that a license was required. However, the file does not
clearly document this action, nor does it include documentation specifying the
need and time frame for corrective action.
Commission should improve management of substantiated
violations—Specifically, the Commission should:
􀁺􇩅 Establish and implement policies to guide commission staff actions for
violations—The Commission has not established any guidance regarding the
types of violations that can be considered de minimis and addressed by staff
versus those more serious violations that should be reviewed and adjudicated
by the Commission itself. Therefore, the Commission should establish and
implement policies regarding the types of violations that would qualify as de
minimis and therefore can be appropriately remedied by its staff and those
violations that are considered more serious and should be addressed by the
Commission. For example, the Commission might determine that it should
review and adjudicate violations involving unlicensed activity or failure to
provide treatment records, while staff could handle other, more minor
violations, such as providing treatment records in a commission-approved
format or proper placement of signage on vehicles.
In addition, although the Commission may take disciplinary action against a
person for willful and repeated de minimis violations, it has not established any
guidance for its staff regarding the frequency or types of violations that would
be considered willful and repeated and therefore should be forwarded to the
Commission for possible action. For example, repeated violations could
signify any number of violations that occur within a specified time period, such
as four violations within 5 years, or could signify two or more similar violations
regardless of when they occur. Therefore, the Commission should establish
State of Arizona
page 18
As allowed by law, in
some cases, staff have
addressed substantiated
violations.
A violation
that, although undesirable,
has no direct or immediate
relationship to safety, health,
or property damage.
Source: A.R.S. §32-2301(5).
and implement policies that clearly define for its staff willful and repeated
violations, including such criteria as the number and frequency of occurrence,
that would require staff to forward them to the Commission.
􀁺􇩄 Document enforcement actions—In addition to establishing and
implementing policies directing the types of violations that its staff can handle,
the Commission should ensure that its staff document both the staff’s actions
taken to educate and remediate these violations and the licensee’s actions to
return to compliance. For example, although a commission official reported
that staff took actions to address the substantiated violations in four of the five
inquiries reviewed by auditors, only one of the five inquiry files contained
documentation of the action. This documentation included written instructions
regarding the statute that was violated, a brief description of the violation, an
explanation regarding how and when the licensee should comply, an official
warning that failure to provide written evidence of correction may result in
additional enforcement action, and the licensee’s signature. However, the
remaining four cases did not contain similar documentation, and it is unclear
what action staff took. Therefore, the Commission should establish and
implement procedures requiring staff to document actions taken to address
violations, including such information as the nature of the violation, statute or
rule violated, and an explanation of the corrective action required and
associated time frame for the licensee to comply.
Further, commission staff should appropriately document the licensee’s
actions taken to return to compliance. While four of these five inquiry files
contain documentation of the licensee’s return to compliance, one of the five
files does not. In this inquiry, even though two separate violations regarding
treatment records are substantiated, there is no evidence in the file indicating
that the licensee made any corrections at all. Thus, the Commission should
ensure that for inquiry cases in which staff remedied violations, the licensee’s
return to compliance is documented in the case file.
The Commission should also retain a record of inquiries with substantiated
violations, including documentation supporting the licensee’s return to
compliance. As allowed by law, the Commission purges closed inquiries from
its records, regardless of whether a violation was substantiated. By closing
and purging inquiries with substantiated violations, the Commission will not
retain a record of the violation, the action staff took as a result of the violations,
and the documentation supporting the licensee’s return to compliance. As
A.R.S. §32-2321(N) authorizes the Commission to take disciplinary action in
the event of willful and repeated de minimis violations, documentation of these
violations and commission staff and licensees’ actions would be needed to
help support any potential disciplinary action.
Office of the Auditor General
page 19
The Commission should
retain a record of
inquiries with
substantiated violations.
Recommendations:
1. The Commission should establish specific time frames for each phase of its
investigative process.
2. The Commission should establish a specific time frame within policy ensuring
that the number of days from inquiry receipt to complaint adjudication is no
longer than 180 days.
3. The Commission should improve the quality of the information in its inquiry and
complaint databases by:
a. Developing and implementing procedures directing staff to enter
information on inquiry and complaint investigative activity in a timely and
accurate manner and verifying the information’s accuracy; and
b. Adding fields to the existing data entry form to include key investigative
activities, such as documenting the date the inspector receives
documentation, interviews a client, performs an inspection, or collects
samples, as well as other important dates, such as when supervisors
review the investigative reports.
4. The Commission’s Executive Director should generate and review monthly
management reports that track the progress of inquiry and complaint
investigations and ensure that the internal time frames of the investigative
processes are met.
5. The Commission should ensure that it has sufficient staff resources to
investigate complaints by reviewing the responsibilities assigned to its
investigators and other staff and prioritizing these responsibilities among its staff
accordingly.
6. After the Commission assesses its needs, it should determine whether it can
meet its investigation and inspection responsibilities with existing staff or by
taking other steps. If not, as appropriate, the Commission should seek
legislative approval for additional staff.
7. The Commission should establish and implement policies regarding:
a. The types of violations that would qualify as de minimis and therefore can
be appropriately remedied by its staff, and those violations that are
considered more serious and should be addressed by the Commission;
and
State of Arizona
page 20
b. The definition of willful and repeated violations, including such criteria as the
number and frequency of occurrence that would require staff to forward
violations to the Commission.
8. The Commission should establish and implement procedures requiring staff to
document actions taken to address violations, including such information as the
nature of the violation, the statute or rule violated, an explanation of the
corrective action required, and associated time frame for the licensee to comply.
9. The Commission should ensure that the licensee’s return to compliance is
documented in the case file for any cases in which staff remediate violations.
10. The Commission should retain a record of inquiries with substantiated violations,
including documentation supporting the licensee’s return to compliance.
Office of the Auditor General
page 21
State of Arizona
page 22
Commission needs to better monitor inspections
To ensure inspections of licensees are appropriately prioritized and conducted, the
Commission needs to better monitor its inspections. Although the Commission has
an established plan for prioritizing inspections in which each licensed business
should receive three types of inspections every 2 years, many licensees have not
received these inspections. Improved monitoring of inspections would help ensure
that the Commission inspects all licensees. Additionally, the Commission should
implement and monitor the use of its revised inspection manual and forms to ensure
complete and consistent inspections. Finally, the Commission should ensure that
licensees take appropriate corrective actions to address violations identified during
inspections.
Commission has not met inspection goals
While the Commission established a plan outlining its inspection goals, it did not
meet these goals for fiscal years 2005 and 2006, and its plan did not sufficiently
guide the inspections that were performed. Performing inspections represents a
critical activity for the Commission as they help to detect, and in some instances
prevent, potentially hazardous situations for the public. However, between July 1,
2004 and June 30, 2006, many licensees did not receive all prescribed inspections,
including 138 of its 812 licensees that received no inspections at all, while several
licensees were inspected numerous times.
Inspections help ensure safe use of pesticides—Inspections protect the
public by helping ensure that licensees properly and safely use and apply
dangerous pesticides. When properly conducted, inspections can detect
violations of statutes and rules that have been established to protect the public
from health hazards and financial loss as a result of the misuse of pesticides. For
example:
Office of the Auditor General
FINDING 2
page 23
􀁺􇩖 Vehicle inspection violation—According to a commission inspector
supervisor, an inspection identified malfunctioning equipment on a licensee’s
vehicle that had the potential for hazards if not corrected. Specifically, during
a vehicle inspection, a commission inspector noted a leak in the equipment
that was being used to transfer pesticide. This leak potentially could have
resulted in off-site contamination leading to potential hazards for those
coming in contact with the leaking pesticide.
􀁺􇩕 Use inspection violation—Inspectors conducted an inspection of a termite
pre-treatment application at a construction site. The applicator was not
wearing the clothing required by the chemical product label when making the
application. Also, the applicator applied no more than 120 gallons of the
chemical rather than the more than 900 gallons that should have been
applied. In addition, the applicator left a falsified tag at the site that indicated
that she applied 1,074 gallons of the chemical. These violations, in addition to
past violations for this business licensee, resulted in a fine for the business
licensee and the revocation of the applicator’s license. This inadequate pre-treatment
application could have resulted in future costs to the site owner for
termite damage.
Many licensees have not received inspections—Although the
Commission’s plan prescribes that licensees should receive three types of
inspections at least once every 2 years, several licensees have not received these
inspections. In 2003, the Commission established an inspection plan specifying
that each licensed business should receive a use, vehicle, and office inspection at
least once every 2 years. However, auditors’ review of the inspections performed
by the Commission for the 2 years between July 1, 2004 and June 30, 2006,
determined that many licensees did not receive the prescribed inspections.
According to the Commission’s licensing database, 812 pest control companies
had licenses during this time, and thus were eligible for inspections. Of these, 378,
or 47 percent, did not receive a use inspection, which according to a commission
official is the most important type of
inspection, as these inspections are most
likely to identify violations that could result in
health and environmental hazards.
Additionally, 324 licensees, or 40 percent, did
not receive a vehicle inspection, and 256
licensees, or 32 percent, did not receive an
office inspection. Finally, only 377 of the 812
licensees, or 46 percent, received all three
inspections, while 138 licensees, or 17
percent, received no inspection at all
between July 1, 2004 and June 30, 2006.
State of Arizona
page 24
Inspections can identify
various violations,
including pesticide
leaking from equipment.
Nearly 47 percent of
licensees did not receive
a use inspection in fiscal
years 2005 and 2006.
Use Inspection—Involves inspections of licensee’s pesticide
applications to ensure they are proper and safe. Includes tag monitors,
inspections of termite treatment applications that involve a review of
information recorded on a tag at the application site.
Vehicle Inspection—Involves an inspection of pesticide storage and
safety equipment on vehicles to ensure the licensee maintains all
required equipment on vehicles.
Office Inspection—Involves an inspection of office records to ascertain
whether the licensee properly maintains required records.
Source: Structural Pest Control Commission official.
Some licensees have received many inspections—While many licensees
did not receive at least one use, vehicle, and office inspection in the 2 years
between July 1, 2004 and June 30, 2006, some licensees received many
inspections. For example, while 378 of the 812 licensed companies did not receive
a use inspection, 5 licensed companies received more than 50 use inspections
each, including tag monitors. Although the Commission conducted use
inspections related to both main and branch offices for 3 of the 5 licensed
companies, one licensee received 156 use inspections during that 2-year time
period. In fact, the Commission actually conducted a greater number of
inspections between July 1, 2004 and June 30, 2006, than its goal required.
Specifically, the Commission reported conducting 4,888 inspections during this
time, yet only needed to conduct 2,436 inspections to meet its goal of each of its
812 licensees receiving a use, vehicle, and office inspection. According to a
commission official, some companies received numerous inspections because
they are large companies and work extensively in termite control, a category in
which there are a higher number of consumer complaints. However, despite
focusing inspections on these companies, some companies licensed to provide
termite control services did not receive any use inspections during this time.
Commission should improve monitoring to meet revised
inspection plan and goals
The Commission has revised its inspection plan to better ensure licensees receive
necessary inspections, but it should also improve its monitoring of inspections. The
Commission has revised its plan to more systematically direct and determine the
number and distribution of inspections. In addition to implementing this approach,
the Commission should better monitor inspections to ensure inspection goals are
met and inspectors adhere to its plan.
Commission revised its inspection approach—During the audit, the
Commission revised its approach for determining the number and distribution of
inspections. While the Commission’s inspection plan that was in place when the
audit was initiated established a goal of conducting a use, vehicle, and office
inspection for each licensed business at least once every 2 years, this plan
provided minimal direction regarding additional inspections. Specifically, this plan
did not establish how these additional inspections should be distributed among
licensees in the various licensing categories. For example, the plan did not specify
the number of additional inspections to be performed in each license category, nor
did it specify the distribution of these inspections among inspectors.
Office of the Auditor General
page 25
Despite some licensed
companies not receiving
any use inspections, 5
received more than 50
each.
The Commission’s revised inspection plan still requires each licensed business to
receive at least one use, vehicle, and office inspection every 2 years, and provides
enhanced guidance and direction for performing additional inspections of
licensees. This guidance specifically focuses on conducting additional use
inspections. As previously mentioned, use inspections are most likely to result in
the detection of potential health and environmental hazards. In its revised plan, the
number of additional use inspections to be conducted each month is determined
by the category in which the pest control work is performed.1 Categories in which
large numbers of companies provide services and in which numerous applications
are done, such as general pest and termite control, are allotted a higher
percentage of total use inspections than categories in which relatively few
companies provide services, such as fumigation and fungi. Based on these
percentages, the plan identifies the actual number of inspections per category that
each inspector should complete on a monthly and annual basis. The plan also
includes a monthly distribution of use inspections to be conducted at specialized
locations (e.g., schools, food establishments, and healthcare facilities) to meet the
requirements of a cooperative agreement with the United States Environmental
Protection Agency (EPA).2
The Commission should ensure that its revised inspection plan is fully
implemented by monitoring the distribution of inspections that are performed. It
should also periodically identify and make necessary changes to its inspection
plan based on the results of inspections or to reflect changes in its population of
licensees.
Commission should better monitor inspection activity—While the
Commission’s revised inspection plan will not ensure that each licensee receives
at least one use, vehicle, and office inspection every 2 years, improved monitoring
of inspections can. The Commission has not actively monitored the numbers and
types of inspections performed by its inspectors. While inspectors are assigned to
perform inspections within specific geographic areas throughout the State, and the
resulting inspection information is generally available through the Commission’s
inspection database, until January 2007, the Commission lacked procedures
directing supervisory review and monitoring of inspection activities. According to a
commission official, supervisors also did not generate reports that track inspection
activity to ensure each licensed business received an appropriate number of
inspections. This same official indicated that responsibilities related to inquiry and
complaint investigations have also detracted from supervisors actively monitoring
inspection activity.
In January 2007, the Commission established procedures requiring the
supervisory review and monitoring of inspection activities. The Commission should
ensure that its supervisors follow these procedures to help ensure that the
distribution of inspections performed is appropriate, including that each licensee
1 Licensees are licensed to perform services in various categories, such as termite control, weed control, fumigation, and
aquatic pests.
2 The Commission has a cooperative agreement with the EPA in which it agrees to monitor specialized inspections for
pesticide use violations. The EPA reimburses the Commission for the costs of these inspections.
State of Arizona
page 26
receives at least one use, vehicle, and office inspection every 2 years. The
Commission should also establish and implement procedures requiring its
inspection supervisors to generate monthly management reports to track
inspection activities. This will help ensure that inspection goals are met, as well as
ensuring that the numbers and types of additional inspections performed are
consistent with the Commission’s plan. According to a commission official,
supervisors have instructed their inspectors on the number of inspections needed
and will track and document the inspections that are conducted.
To help document and track inspections, as well as to use available information to
help guide inspection activity, the Commission should enhance and appropriately
use its various databases. The Commission can use its inspection database to
monitor inspection status and its other databases to obtain relevant information to
guide inspection activity, but there are limitations with these databases that prevent
accessing and using all available information. As such, the Commission needs to
improve these databases. (See Finding 3, page 33 through 39, for more details
regarding database limitations and recommended improvements).
Commission should further improve inspection guidance
In addition to ensuring that all licensed companies receive inspections, the
Commission should take additional steps to improve these inspections’ adequacy
and consistency. Specifically, while the Commission uses inspection forms and relies
on statute and administrative rules to guide its inspections, these materials do not
provide sufficient guidance regarding appropriate inspection procedures. Therefore,
the Commission should develop and implement more detailed inspection policies
and procedures by completing revisions to its inspection manual and providing it to
inspectors.
Inspection forms do not provide sufficient guidance—In addition to
using statute and administrative rules, the Commission has provided inspectors
with inspection forms to help guide the performance of inspections. These
inspection forms denote the general areas that should be reviewed during
inspections. According to a commission official and inspector supervisor, the
information in the inspection forms, along with statute and rule, should sufficiently
assist inspectors in properly performing inspections. However, the guidance in the
forms is insufficient to ensure inspectors consistently and properly perform
inspections. Auditors’ observations of inspections where the inspectors used the
forms found that some necessary steps were incorrectly performed. For example:
􀁺􇩃 Compliance with pesticide labeling requirements not properly
checked—As part of a use inspection, inspectors should determine if the
applicator appropriately follows the pesticide labeling instructions. However,
Office of the Auditor General
page 27
Monthly management
reports would help track
inspection activities
against the inspection
plan and goals.
Commission inspectors
have not received
adequate guidance to
perform inspections.
the form does not contain procedures for checking this information. According
to a commission official, when inspecting for this requirement, the inspector
should question the applicator as to where on the label it allows him/her to
make the application and confirm that the applicator indicates the part of the
label that shows that the correct product is being used. By requiring the
applicator to demonstrate that the application of the pesticide is consistent
with the product’s labeling, the inspection helps to ensure proper pesticide
application. However, auditors’ observation of a use inspection determined
that the inspector noted that the applicator complied with the pesticide
labeling instructions regarding the targeted pest without questioning the
applicator.
􀁺􇩃 Compliance with filing requirements for Termite Action Report Forms
(TARFs) not properly checked—As part of an office inspection, inspectors
should determine if the business licensee is filing TARFs with the Commission
for each termite treatment. However, the inspection form does not contain
procedures for checking this. According to a commission official, when
inspecting for this requirement, the inspector should compare the company’s
contracts or billing records against a printout of the Commission’s database
record of all the TARFs filed with the Commission. This ensures that the
company has filed forms for each termite pretreatment that it has done.
However, auditors’ observation of an office inspection determined that the
inspector compared a database printout of the TARFs filed by the company to
the copies of the TARFs. However, the inspector did not review contract or
billing records to determine if termite pre-treatment work had been done for
which no TARFs had been filed with the Commission.
The Commission has drafted separate inspection forms for vehicle and office
inspections to better reflect the associated inspection activities that should occur
for each type of inspection. Previously, commission staff used one form for both
inspections, and this form provided inadequate guidance to inspectors regarding
the performance of these two types of inspections. However, according to a
commission official, the new forms will not be implemented until corresponding
database changes can be made to allow the new forms to be entered. This official
stated that these database changes will not be implemented until other high-priority
changes are made. (See Finding 3, pages 33 through 39, for more
information on planned database changes.)
Commission needs to implement and monitor compliance with
revised policies and procedures—While the Commission developed an
inspection manual, according to auditors’ observations and interviews with
individual inspectors, this manual is not used to guide the performance of
inspections. According to one inspector, since becoming an inspector in
November 2004, that inspector had not been provided with an inspection manual
or any other written materials regarding inspection procedures and was not even
State of Arizona
page 28
aware that an inspection manual existed. Another inspector indicated that
although he had helped develop the inspection manual in approximately 2001 and
2002, he was under the impression that none of the inspectors used it. Additionally,
during auditors’ observations of inspections by two separate inspectors, no
inspection manual was used. According to commission officials, the manual has
not been used because it is in revision to include more comprehensive information
on how to conduct inspections, supervisory responsibilities for inspections, and
data entry instructions.
The Commission needs to finalize revisions to its inspection manual and then
implement and monitor inspectors’ compliance with these changes. During the
audit, a commission official agreed that written procedures would be helpful, and
as a result, commission staff are revising some of the policies and procedures
within the inspection manual, as well as developing new ones. According to a
commission official, the manual will also include guidelines for supervisors with
regard to checking inspectors’ compliance with the revised inspection plan for
conducting inspections, information on reports used and how to use them, and
instructions on how to enter and retrieve data from the databases. According to a
commission official, training was provided to all inspectors and inspector
supervisors in May and June 2007 using the latest draft of the inspector manual.
During this training, as discussions regarding the manual were held and further
revisions suggested, the Commission planned to incorporate these revisions prior
to finalizing the manual.
The Commission should complete the revisions to its inspection manual, including
incorporating revisions that were suggested from its training, and ensure that all
inspectors and supervisors are fully trained on the inspection materials, including
all policies and procedures. Once the inspection manual has been finalized, the
Commission should implement the revised forms and policies and procedures.
Additionally, as new inspectors are hired, the Commission should ensure they are
fully trained on these materials. Finally, the Commission should monitor inspectors'
compliance with the policies and procedures by requiring supervisors to
periodically observe inspections and by frequently meeting with inspectors to
ensure they understand the policies and procedures.
Commission should ensure licensees correct inspection
violations
While the Commission requires licensees to correct violations identified during
inspections, it does not ensure that licensees take corrective action in all cases.
According to a commission official, licensees should provide the Commission with a
written notice of correction within 20 days of the inspection to indicate that any
Office of the Auditor General
page 29
The Commission is
revising its inspection
manual.
violations or items of noncompliance have been corrected. However, based on a
review of 54 office or vehicle inspections conducted between July 1, 2004 and June
30, 2006, that resulted in 27 inspections with violations or noncompliance items,
auditors identified 7 inspections that lacked evidence or documentation indicating
that the licensee took corrective action. Without documentation and, in some cases,
followup, the Commission has no assurance that the licensee appropriately
addressed the violation or noncompliance item.
Therefore, the Commission should establish and implement procedures for its staff
to follow to ensure that licensees take corrective actions to address violations or
noncompliance items. For some violations, depending on the seriousness and
nature of the violation, this may require a follow-up visit by an inspector. According to
a commission official, while inspectors would visually confirm corrective action if
warranted by the violation, the Commission lacked written procedures guiding these
activities. In February 2007, the Commission established procedures indicating the
types of violations that require a follow-up visit. The Commission should ensure that
its inspectors follow these procedures and establish additional procedures requiring
inspectors to randomly select submitted notices of corrective action for verification.
Recommendations:
1. To ensure implementation of its revised inspection plan, the Commission
should:
a. Ensure that its supervisors follow supervisory review and monitoring
procedures established in January 2007 to help ensure that the distribution
of inspections performed is appropriate, including that each licensee
receives at least one use, vehicle, and office inspection every 2 years;
b. Establish procedures requiring its inspection supervisors to generate
monthly management reports to track inspection activities; and
c. Periodically identify and make necessary changes to its inspection plan
based on the results of inspections or to reflect changes in its population of
licensees.
2. To better guide its inspectors, the Commission should:
a. Complete its revisions to its inspection manual, including incorporating
revisions suggested from the planned training it held;
State of Arizona
page 30
Some inspections
identifying violations
lacked evidence that the
licensee took corrective
action.
b. Implement the revised forms, policies, and procedures once the inspection
manual has been finalized; and
c. Ensure that all inspectors and supervisors are fully trained on the inspection
materials, including all policies and procedures.
3. The Commission should monitor inspectors’ compliance with the revised
policies, procedures, and forms by requiring supervisors to periodically observe
inspections and by frequently meeting with inspectors to ensure they
understand the policies and procedures.
4. The Commission should ensure that licensees take corrective actions to
address violations or noncompliance items by:
a. Ensuring that its inspectors follow procedures established in February 2007
that specify the types of violations that require a follow-up visit; and
b. Requiring inspectors to randomly select submitted notices of correction for
verification.
Office of the Auditor General
page 31
State of Arizona
page 32
Office of the Auditor General
page 33
Commission should further improve its
information management systems
The Commission should continue to improve its information management systems
to more effectively manage the agency and better protect the public. While the
Commission relies on various databases for managing information, concerns about
the reliability of some of these databases and staff’s inability to readily access
information in these databases impede their use. The Commission has begun
addressing some of these issues, but should take additional steps to ensure the
reliability of its databases. Additionally, by improving databas reliability, the
Commission should be able to improve public access to this information through its
Web site, including access to complaint information.
Inadequate information
management creates difficulties
The Commission uses various databases to
track its activities, but impediments to the use
of these databases make accessing and
reviewing necessary information difficult for
commission staff and the public. Specifically,
while the Commission maintains several
different databases, the information in some of
these databases is unreliable, and commission
staff cannot readily access needed information.
As a result, both commission staff and the
public do not have access to timely and reliable
information to make decisions.
FINDING 3
Licensing—Contains information such as the license status
of companies and the categories in which the company is
licensed.
Complaint—Contains information such as when a
complaint was received and the complaint allegations.
Inquiry—Contains information such as when an inquiry was
received and whether an inquiry becomes a complaint.
Inspections—The inspections database includes
information such as when an inspection was performed, the
inspection type, and the company or individual inspected.
TARFs—The TARF database, called CompuTAR, is the
database the Commission uses for the submission of
TARFs by pest control businesses.
Source: Auditor General staff analysis of commission databases and information
provided by commission staff.
State of Arizona
page 34
Impediments exist to effective database use—Commission management
faces some obstacles to the effective use of its databases. The Commission has
developed several databases to track and maintain key management information
on licensing, complaints and inquiries, inspections, and TARFs. These databases
contain information such as the license status of pest control companies,
complaint allegations, and information on the number and types of inspections
performed. These databases are maintained by the Commission’s Information
Technology (IT) section, which consists of two staff members. However, the
unreliability of some of these databases, including inadequate controls over data
entry in the complaint database, the need for extensive IT assistance for basic
report generation, and the lack of sufficient documentation to guide database use,
affect management and staff’s ability to effectively use this information.
Specifically:
􀁺􇩓 Some databases contain unreliable information—Based on auditors’
review, closure date information in the inquiry database for some inquiries was
determined to be inaccurate or could not be verified. Based on an open
inquiry report dated September 7, 2006, the inquiry database indicated that 77
cases were open. However, during the audit and in response to auditors’
questions regarding the timely investigation of inquiries, commission
management entered a closure date for several of these open inquiries. For
some of these inquiries, the inquiry file had been placed into a complaint file
and a closure date was available. In 15 cases, the inquiry file was not
available, leaving no case file information from which to determine the closed
date.1 In these cases, commission management relied on recollections of
staff to help estimate the closure date. Auditors reviewed all 62 available
inquiry case files and compared the closure dates from these files to closure
dates on the inquiry database. This review revealed that although 6 of the 62
files had a close date in the file, no close date had been entered in the
database. Additionally, for 21 of the 62 cases, the closure date in the database
was inaccurate, although in 7 cases the discrepancy was only 1 day. In the
remaining 14 of 21 cases, the discrepancies were between 2 and 357 days.
Auditors also randomly sampled 58 use and 66 vehicle and office inspection
forms from July 1, 2004 to June 30, 2006, and determined that the
Commission’s inspections database did not contain all completed
inspections. Specifically, auditors identified two use inspection forms and one
office inspection form that had not been entered into the database.
􀁺􇩃 Complaint database had inadequate controls—Information in the
complaint database that predates mid-2004 is not sufficiently reliable due to
inadequate controls, such as giving multiple people, including temporary
employees, access to various database fields and not cross-checking the
data entered into the database against case files. In mid-2004, the number of
1 Some of these 15 case files may have been purged, as allowed by statute, but auditors cannot confirm how many had
been purged.
The inquiry database
contains some
inaccurate and
unverifiable data.
Office of the Auditor General
page 35
employees with data entry responsibilities was limited to three people, and
one employee was assigned to cross-check data entered into the database.
However, inadequate database system controls have not allowed employees
to consistently enter data, such as licensed company names and allegations,
while some information is missing from the database, such as when the
complaint investigation was completed. A commission IT staff member
agreed that data in the complaint database needs to be validated for accuracy
and completeness.
􀁺􇩎 Needed information not readily accessible—In addition to the database
reliability concerns, commission management and staff cannot easily access
the information they need to perform their work and provide necessary
oversight. Specifically, while the databases provide the functionality to create
and provide several reports with useful information to management and staff,
for the most part, these reports have not been created. According to the
Commission’s IT Director, the only reports that have been created relate to
information that must be reported quarterly to the EPA and to support
performance measure information, such as the number of license and license
renewal applications. According to the Commission’s Executive Director, the
performance measure information is reported to the Governor’s Regulatory
Review Council (GRRC). Additional management reports have not been
created because of the Commission’s limited IT resources and the
commitment of these resources to higher-priority projects, such as creating
the necessary technology for Web-based license renewals.
According to some commission staff, demand exists for other standard
management reports to provide basic information. For example, a
commission licensing staff member demonstrated for auditors that the
licensing database could not be used by this staff member to run a report
listing all of the inactive or expired licenses, and staff must instead contact the
IT Director to obtain this information. According to a commission official, the
capability to run this type of report exists, but was not working and has since
been corrected during the audit. Auditors also found that commission
licensing staff had to rely on IT staff to obtain reports regarding the total
number of license applications the Commission received in the different
license categories. According to a commission official, while this information
could be obtained from other system applications, the licensing database will
be updated with this capability.
􀁺􇩃 Commission databases insufficiently documented—Auditors also found
that documentation of the Commission’s IT databases, which explains how
the databases function and can be used, is insufficient. Documentation and
manuals need to be available to users and IT department staff to provide the
information necessary for successful system operation and use. However, the
Commission has not created any documentation regarding the structure and
Commission
management and staff
cannot easily access
necessary information.
State of Arizona
page 36
use of the databases, nor has it created user manuals to serve as a reference
for staff who use the databases. According to the IT Director, creating this
documentation has not been a high priority because of the lack of time and
staff. Additionally, this lack of sufficient documentation could place the
Commission in a difficult position if the IT Director were to ever leave the
Commission, since he possesses most of the database knowledge.
Data limitations affect commission management oversight and
public access to information—The limitations of the Commission’s
databases impede management’s ability to oversee the agency. For example,
when inquiry closure dates are not entered into the database after a case is closed,
management’s ability to track and report on the timeliness of case resolution is
impeded. Additionally, the lack of management reports and system
documentation affects management’s ability to obtain, analyze, manipulate, and
review basic information and data that results from the Commission’s primary
functions and operations.
Additionally, the presence of some unreliable information in the Commission’s
databases affects its ability to provide timely information to the public. When the
Commission receives a request for complaint information from the public, instead
of relying on the complaint database to provide this information, because of
questions regarding the reliability of this information, a commission staff member
must gather and review all pertinent complaint information from complaint files to
fulfill these requests. As a result, a public information request may require several
days to fulfill. For example, an auditor called the Commission to ask about a
prospective pest control provider to handle a tick infestation problem and was told
that the requested information would likely not be provided for 2 weeks. Since the
auditor could not wait 2 weeks to take care of the tick infestation problem, she had
to choose a company without information from the Commission. When another
auditor called requesting complaint information, the auditor was likewise informed
that the request would take 5 to 10 days to fulfill.
Commission should further improve information
management
While the Commission has made some efforts to improve its information
management practices, additional steps are needed. The Commission is taking
some steps to improve its information management, including seeking legislative
authorization for funding to bolster its IT staff and identifying the information
management needs of its staff. Additionally, the Commission should develop and
implement policies and procedures to guide data entry and verification practices,
and begin creating needed management reports.
It takes the Commission
several days to provide
complaint history
information in response
to public requests.
Commission taking steps to improve information management—In
2005, the Commission initiated efforts to improve its information management. The
first of these efforts involved seeking additional IT staff. According to the IT Director,
until the Commission hired a second IT person in 2005, he was the only IT person
on staff for 15 years. In 2006, the Commission recognized the need for a third IT
staff person and initiated the process of seeking funding authority from the
Legislature. According to the fiscal year 2008 State of Arizona Appropriations
Report, the Commission received authorization to hire an additional IT staff person
to provide customer service and maintain IT systems for fiscal year 2008. The
Commission also received authorization to spend an additional $10,000 for a
consultant to create and update documentation for the existing databases.
According to a commission official, the Commission has initiated efforts to obtain
these additional IT resources, and once these resources are obtained, the
Commission should ensure that these documentation projects are completed in a
timely manner.
The Commission has also initiated a process to solicit input from management
and staff regarding their information needs. In September 2006, the IT Director met
with various management users to begin discussing their information needs.
However, IT staff resources would be needed to design and program the
necessary reports to provide the information management and staff requested and
according to the IT Director, development of a system called e-TARF, which will
allow for the electronic filing of TARFs, has been designated as his highest priority.
TARF filings represent a major source of fee revenue for the Commission, and the
e-TARF system is scheduled for implementation in October 2007.1
IT staff are also working on integrating the Commission’s various databases, which
would enhance the Commission’s data management and analysis capabilities.
The Commission’s Executive Director stated that the database integration project,
which began in October 2001, needs to be implemented before the Commission
can create some useful management reports. This is because the integration
project will link the information housed separately in each of these databases. For
example, once the databases are integrated, the Commission should be able to
generate a report showing a licensee’s complaint and inspection history, including
any violations that resulted. This type of information should help commission
management allocate its inspection resources by determining which licensees
warrant additional inspections based on the number and type of complaints and/or
violations a licensee has received.
While these projects are important, the Commission should also plan to develop
needed management reporting capabilities that do not require database
integration. Specifically, it should monitor the progress of these two ongoing
projects and determine when resources would become available to begin
Office of the Auditor General
page 37
1 TARFs must be filed whenever a pest control action regarding termites, such as a pre-treatment of new construction,
occurs. TARFs require an $8 filing fee. According to a commission official, the Commission estimates that 79 percent of
its 2007 revenues will come from TARF filing fees.
Commission
management should
monitor resource
availability to develop its
IT reporting capabilities.
developing management reporting capabilities. The Commission should then
develop plans for creating needed reports, and identify and allocate the necessary
resources for doing so.
Commission actions needed to ensure database accuracy—The
Commission should also ensure the accuracy of the information in its databases.
To do so, it should develop and implement policies and procedures for data
handling, including data entry, and for testing the data that currently resides in the
databases. This would involve comparing database information to corresponding
information contained in case files and correcting any inaccurate data. The
Commission should concentrate on validating information contained in the inquiry
and complaint databases, which auditors’ analysis determined contain some
unreliable information or information for which input controls were lax.
Database improvements will improve public assistance
The Commission is making several improvements to information management that
will allow for better public access to information. For example, the Commission is
working to integrate the complaint database into the same database that will contain
licensing, inspection, TARF, and other pertinent data. According to the IT Director,
one benefit of this improvement will be that the complaint information could be pulled
from the database to the Commission’s Web site. This would allow members of the
public to obtain information regarding the background of a prospective pest control
company and make a quick, informed decision whether or not to hire the company.
Once the Commission has completely integrated the complaint database with its
other databases and ensured that the complaint information is accurate, it should
upgrade its Web site to allow public users to obtain complaint history information
regarding licensed companies and individuals through the Internet.
Recommendations:
1. Once the Commission obtains the additional IT resources appropriated for fiscal
year 2008 to create sufficient documentation for commission databases, it
should ensure that these documentation projects are completed in a timely
manner.
2. The Commission should plan to develop needed management reporting
capabilities that do not require database integration by:
State of Arizona
page 38
a. Monitoring the progress of the e-TARF and database integration projects
and determining when resources would become available to begin
developing management reporting capabilities, and
b. Developing plans for creating needed reports and identifying and allocating
the necessary resources for doing so.
3. To ensure the accuracy of data in its databases, the Commission should:
a. Develop and implement policies and procedures for data handling,
including data entry, and for testing the data that currently resides in the
databases;
b. Compare database information to information contained in hard-copy files
and make any necessary changes to the databases; and
c. Concentrate on the information contained in the inquiry and complaint
databases, since there are strong indications that some data in those
databases is unreliable.
4. Once the Commission has completely integrated the complaint database within
its other databases and ensured that the complaint information is accurate, it
should upgrade its Web site to allow public users to obtain complaint history
information regarding licensed companies and individuals via the Internet.
Office of the Auditor General
page 39
State of Arizona
page 40
Office of the Auditor General
In accordance with A.R.S. §41-2954, the Legislature should consider the following 12
factors in determining whether the Arizona Structural Pest Control Commission
(Commission) should be continued or terminated:
1. The objective and purpose in establishing the Commission.
The Commission was created in 1988 to protect the public from chemical harm
and harm resulting from inadequate or improper structural pest control. Its
predecessor was the Arizona Structural Pest Control Board, which was
established in 1965.
The Commission regulates the pest control industry by issuing licenses to
qualified applicants, setting standards of pest control treatment, inspecting pest
control companies, investigating inquiries and complaints, and disciplining
licensees. Under the provisions of the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA), the Commission has the primary responsibility for
enforcing pesticide regulation in the State.
2. The effectiveness with which the Commission has met its objective and purpose
and the efficiency with which it has operated.
While the Commission performs many of its responsibilities effectively and
efficiently, it needs to improve some of its functions. The Commission has met
its objective and purposes in the following ways:
􀁺􇩔 Timely processing of licenses—The Commission processed most of the
initial license applications auditors reviewed within the three required time
frames for licenses it issues. These time frames consist of an initial
administrative review to verify the application is complete (7 days), the
Commission’s substantive review and disposition (60 days), and the overall
time frame for both reviews (67 days).
SUNSET FACTORS
page 41
As illustrated in Table 3, auditors reviewed a random sample of ten license
applications received between January 1, 2004 and June 30, 2006, to
determine the Commission’s compliance with the overall 67-day time frame
and found that the Commission processed all ten of these applications
within 67 days1. For seven of the ten licensing applications reviewed, the
Commission met the initial 7 days allotted for the administrative review. For
the three cases commission staff did not review within the 7-day time frame,
commission staff took between 21 and 45 days to review the cases.
However, these three cases were processed well under the time allotted for
the substantive and overall reviews.
Despite meeting its time frames for processing license applications, the
Commission should ensure that it reviews and approves all license
applications. Specifically, the Commission did not review and approve the
four applicator license applications. Instead, commission staff approved
these license applications. According to A.R.S. §32-2304(A)(19), the
Commission is required to license applicators, qualifying parties, and
businesses. Additionally, A.R.S. §32-2304(G)(1) stipulates that the
Commission cannot delegate this responsibility to staff. During its July 2007
meeting, the Commission ratified all appicator licenses issued since
September 17, 2003, and will begin to review all applicator license
applications on a monthly basis.
􀁺􇩃 Consistent discipline applied—For the complaints reviewed by auditors,
the Commission appears to consistently and appropriately apply
disciplinary penalties. Auditors’ review of the Commission’s enforcement
action matrix, which is used to ensure the Commission assigns consistent
1 In administrative rule changes that became effective in April 2007, the Commission revised its time frames for processing
and approving licenses, including changing its overall time frame from 67 days to 130 days. This change occurred after
auditors analyzed the Commission’s compliance with the 67-day requirement.
State of Arizona
page 42
Table 3: Number of License Applications Processed
Within Time Frames
From January 2004 through June 2006
Number of
Applications in
Sample
Conducted
Administrative
Review within
7 Days
Conducted
Substantive
Review within
60 Days
Conducted
Overall Review
within
67 Days
Applicator 4 4 N/A1 4
Qualifying party 3 1 3 3
Business 3 2 3 3
Total 10 7 6 10
1 Commission staff reviewed and approved these four applicator license applications. These applications were not
forwarded to the Commission for substantive review.
Source: Auditor General staff analysis of ten applications the Commission received between January 1, 2004 and
June 30, 2006.
discipline and, according to commission staff, is based upon a similar EPA
document, suggests that this tool is a sound method for assigning
penalties. For example, the matrix assigns a point value to the various
aggravating and mitigating factors involved in the violation, such as whether
the violation resulted in human or environmental harm and/or whether the
licensee makes amends with the consumer by providing additional
services. The total factor value corresponds to a numerical scale that offers
a range of possible penalties. Auditors reviewed a random sample of five
complaints involving five different types of violations that the Commission
adjudicated and closed between January 1, 2004 and June 30, 2006, and
determined that the Commission appropriately used its enforcement action
matrix to determine discipline for all five complaints. Further, for each
complaint, notes were entered in the complaint file to explain additional
information that was taken into account when using the matrix.
Additionally, for the five complaints reviewed, auditors determined that the
Commission ensured that the licensees met the requirements and
stipulations of the disciplinary actions and retained evidence that the
disciplinary conditions had been met. For example, documentation
included copies of penalty payment checks, certificates indicating that
classes had been taken, and an e-mail from a commission inspector who
had witnessed repairs being done.
􀁺􇩅 Established process for tracking TARFs—The Commission has
established procedures for filing Termite Action Registration Forms
(TARFs). Within 30 days of each termite treatment by a pest control
company, statute requires the company to submit a TARF and an $8 filing
fee to the Commission. These forms provide information to the
Commission and public regarding termite treatment work, such as the
name of the company and applicator, as well as the date and type of
pesticide treatment made.
According to commission information technology (IT) staff, 80 percent of
licensed pest control companies submit their TARFs using the
Commission’s CompuTAR software, which is provided free of charge. This
software helps commission staff track TARFs by assigning each one a
unique number and printing a statement for the company that records the
TARF report number, property address, date of the termite action, and
whether the TARF was submitted on time. Each company must submit a
copy of this statement to the Commission with its disk and fees. According
to commission staff, paper forms are entered into the system by a data
entry vendor, who reviews the forms and returns any that are incomplete.
This information can be used to track and report to homeowners the history
of termite treatments performed on their homes.
Office of the Auditor General
page 43
The audit also identified some areas in which the Commission can improve its
effectiveness and efficiency. Specifically:
􀁺􇩉 Improve inquiry and complaint processing—The Commission
appropriately investigated most of the inquiry and complaint cases auditors
reviewed; however, the Commission should take additional steps to ensure
the timely and appropriate processing of all inquiries and complaints.
Auditors reviewed a random sample of 44 inquiries and complaints and
determined that commission staff had adequately investigated 42 of them.
However, although the Commission has established time frames for the
processing of inquiries and complaints, it does not consistently meet them.
Specifically, more than half of the cases auditors reviewed for timeliness
were not processed within the Commission’s established time frames.
Establishing time frames for each investigative step and improved
monitoring of the investigation process should help ensure that inquiries
and complaints are processed in a timely manner. Additionally, the
Commission can improve its handling of substantiated violations by
establishing policies regarding which substantiated violations it should
address versus those that staff can remedy, as well as ensuring its staff
document the action taken and retain a record of the inquiry. (See Finding
1, pages 13 through 21.)
􀁺􇩉 Increased monitoring of inspections needed—To ensure inspections of
licensees are appropriately prioritized and conducted, the Commission
needs to better monitor its inspections. Although the Commission has an
established plan for prioritizing inspections in which each licensed business
should receive 3 types of inspections every 2 years (use, vehicle, and office
inspections), many licensees have not received some or all of these
inspections. For example, according to the Commission’s licensing
database, of the 812 companies eligible for inspections between July 1,
2004 and June 30, 2006, 138 licensed businesses did not receive any
inspection at all. Improved monitoring of inspections would help ensure that
the Commission inspects all licensees. Additionally, the Commission
should implement and monitor the use of its revised inspection manual and
forms to ensure complete and consistent inspections. (See Finding 2,
pages 23 through 31.)
􀁺􇩃 Commission staff need improved access to information—The
Commission faces several impediments to effectively using information to
manage the agency. First, auditors found that some data was unreliable
due to weak data entry controls, and some data was inaccurate or
incomplete. Second, commission management must rely heavily on a
small IT staff to handle IT projects, including providing access to basic
management information. Finally, the small IT staff has not sufficiently
documented its databases. Documentation and manuals need to be
available to users and IT staff to provide the information necessary for
successful system operation and use.
State of Arizona
page 44
The Commission’s IT staff has begun addressing some of these
impediments by gathering feedback from agency management about what
information is needed to more effectively manage the agency. Additionally,
the Commission has received authorization to hire additional IT staff
resources to assist with maintaining IT systems and documenting the
databases. However, the Commission should also ensure that it assesses
the reliability of the data in its databases and corrects unreliable data. (See
Finding 3, pages 33 through 39.)
3. The extent to which the Commission has operated within the public interest.
The Commission operates in the public interest in many of its activities.
􀁺􇩆 First, the Commission’s licensing process helps to ensure that licensed
pest control workers possess the knowledge and skills required to perform
pest control work. For example, the Commission ensures that qualified
parties (those responsible to supervise pest control work) document a
minimum of 3,000 verifiable hours of previous pest control work (or 2,000
hours and 12 college semester hours in etymology or pest control work) to
become licensed. Additionally, according to commission staff, the
Commission has established processes to ensure that licensees who apply
or supervise pesticide applications take required continuing education
classes before a license can be renewed. The Commission also approves
continuing education programs.
􀁺􇩓 Second, the Commission provides information to the public through its
Web site in various ways. Its Web site contains information regarding
licensing and continuing education requirements, various forms, and
licensing applications. Additionally, the Web site contains commission
items such as scheduled public meetings, as well as agendas and minutes
from previous meetings. Consumers can also obtain information regarding
the licenses that pest control companies and licensees currently hold, and
information on a variety of pest-related topics, such as asian flu, hanta virus,
mosquitoes, roof rats, and termites. In March 2007, the Commission
launched a new Web site to further improve user access to this information.
The Commission has also added a feature to its Web site that allows
licensees to update routine information and obtain licenses and renewal
forms online. Finally, licensees also have the option of renewing their
licenses through the Commission’s Web site.
􀁺􇩔 Third, the Com