Performance audit, Department of Public Safety aviation section

              State of Arizona
Office
of the
Auditor General
PERFORMANCE AUDIT
Report to the Arizona Legislature
By Debra K. Davenport
Auditor General
June 2000
Report No. 00-7
DEPARTMENT
OF
PUBLIC SAFETY
AVIATION SECTION
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee
composed of five senators and five representatives. His mission is to provide independent and impar-tial
information and specific recommendations to improve the operations of state and local government
entities. To this end, he provides financial audits and accounting services to the state and political
subdivisions and performance audits of state agencies and the programs they administer.
The Joint Legislative Audit Committee
Representative Roberta L. Voss, Chairman
Senator Tom Smith, Vice-Chairman
Representative Robert Burns Senator Keith Bee
Representative Ken Cheuvront Senator Herb Guenther
Representative Andy Nichols Senator Darden Hamilton
Representative Barry Wong Senator Pete Rios
Representative Jeff Groscost Senator Brenda Burns
(ex-officio) (ex-officio)
Audit Staff
Dot Reinhard—Manager
and Contact Person (602) 553-0333
Michele Diamond—Audit Senior
Tanya Nieri—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.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
June 2, 2000
Members of the Legislature
The Honorable Jane Dee Hull, Governor
Mr. Dennis Garrett, Director
Department of Public Safety
Transmitted herewith is a report of the Auditor General, A Performance Audit of the
Department of Public Safety’s Aviation Section. This report is in response to a June 16,
1999, resolution of the Joint Legislative Audit Committee. The performance audit was
conducted as part of the Sunset review set forth in A.R.S. §41-2951 et seq. I am also
transmitting a copy of the Report Highlights to provide a quick summary for your
convenience.
This is the first in a series of reports to be issued on the Department of Public Safety.
As outlined in its response, the agency agrees with most of the findings and will
implement, or implement using a different method, nine of the ten recommendations.
However, it disagrees with the recommendation that the Aviation Section rewrite its
mission statement to change its role in the air ambulance industry to that of a backup
provider.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on June 5, 2000.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
OFFICE OF THE AUDITOR GENERAL
Program Fact Sheet
Department of Public Safety
Aviation Section (DPSA)
Services: DPSA is one of 23 programs within DPS. It offers the following aviation services:
1) Air transport—DPSA provides transportation and protection to the Governor and trans-portation
to Department staff and other state agency staff; 2) Air ambulance—DPSA pro-vides
emergency medical services and air medical transport; 3) Search and rescue—DPSA
performs technical rescue and search-and-rescue support service operations for overdue,
lost, or injured parties; and 4) Law enforcement—DPSA supports federal, state, and local
law enforcement agencies with activities such as aerial pursuits and surveillance.
Program Revenue: $4.6 million
(fiscal year 2000)
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
1998 1999 2000
General Fund Intergovernmental
Program Goals (Fiscal Year 1999-2001):
1. To enhance public safety in Arizona through
enhanced air rescue operations and im-proved
first-responder emergency medical
services.
2. To improve support to the Department and
to other criminal justice agencies through
enhanced air support aerial surveillance op-erations.
3. To improve the subprogram’s effectiveness
through replacement of obsolete equipment
and acquisition and allocation of appropriate
staffing resources.
4. To improve the subprogram’s administrative
effectiveness through automation.
Personnel: 54 full-time staff (fiscal year 2000)
Paramedics
(19)
Administrative
(4) Pilots
(26)
Mechanics
(5)
$3.9
$5.2 $4.6
Facilities: 5 locations, 0 are state-owned.
Facilities: 5 locations, 0
owned.
Insert State Map
Here Central Air Rescue
(North Phoenix)
Administration and
Support (Phoenix, Sky
Harbor International
Airport)
Northern Air Rescue
(Flagstaff)
Western Air Rescue
(Kingman)
Southern Air
Rescue (Tucson)
OFFICE OF THE AUDITOR GENERAL
Adequacy of Performance Measures:
DPSA’s four goals (see the front of this page)
appear reasonably aligned with its mission. To
help it accomplish these goals, DPSA has es-tablished
7 objectives and 33 performance
measures. However, our review of its perform-ance
measures identified the following prob-lems.
n DPSA’s performance measures primarily
focus on short-term, often one-time activi-ties
rather than focusing on its ongoing
services. For example, DPSA has estab-lished
performance measures to develop
legislative proposals for additional em-ployees
and aircraft.
n DPSA has not developed performance
measures to cover all four of its key service
areas (air transport, air ambulance, search
and rescue, and law enforcement).
n DPSA’s measures are not well defined.
DPSA has incorrectly categorized several
measures as outcome measures. These
measures do not address the program’s
impacts or benefits. In addition, DPSA’s
quality measures do not assess customers’
and stakeholders’ satisfaction with serv-ices.
n DPSA’s measures do not include efficiency
measures. Efficiency measures assess pro-ductivity
and the cost of providing prod-ucts
and services such as the cost-per-aircraft
service provided.
Equipment: 9 aircraft
5 single-engine helicop-ters,
configured as air
ambulances. Estimated
replacement value is $2
million each.
2 single-engine air-planes,
seating 3 to 4
passengers each. Esti-mated
replacement
value is $170,000 to
$280,000 each.
2 twin-engine airplanes,
seating 9 to 10 passen-gers
each. Estimated
replacement value is $2
to $4 million each.
i
OFFICE OF THE AUDITOR GENERAL
SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Department of Public Safety’s Aviation Section
(DPSA) as part of a Sunset review of the agency. This audit was
conducted pursuant to a June 16, 1999, resolution of the Joint
Legislative Audit Committee. This audit was conducted under
the authority vested in the Auditor General by Arizona Revised
Statutes §41-2951 et seq. This is the first of several audits of the
Department of Public Safety.
The Department of Public Safety’s Aviation Section (DPSA) is
part of the Highway Patrol Division. DPSA employs 52 full-time
staff and provides a variety of airplane and helicopter services
from several locations across the State. The Aviation Section’s
administrative office and airplane (or fixed-wing) services are
located in Phoenix at the Sky Harbor International Airport. Us-ing
four fixed-wing airplanes, DPSA primarily provides trans-portation
and protection for the Governor and transportation to
Department staff and other state agency staff, and it also assists
in law enforcement activities when needed. DPSA’s helicopter
services are provided from four regional Air Rescue Units: Cen-tral
Air Rescue in Phoenix, Northern Air Rescue in Flagstaff,
Southern Air Rescue in Tucson, and Western Air Rescue in
Kingman. A pilot and paramedic are always on duty at each of
the four units to provide air ambulance (highway automobile
accidents), search-and-rescue (missing hikers), or law enforce-ment
services (aerial pursuits, surveillance, and tactical support).
DPSA Should Serve As
Backup Air Ambulance Provider
to the Private Sector
(See pages 9 through 17)
The expansion of the private air ambulance industry has reduced
the need for DPSA to provide air ambulance services. Although
Summary
ii
OFFICE OF THE AUDITOR GENERAL
DPSA was initially the sole provider of air ambulance services,
today there are also 12 private providers, operating 28 helicopter
air ambulances in the State, and several additional private pro-viders
from California, Nevada, and New Mexico who respond
to calls along Arizona’s borders. The private sector not only of-fers
air ambulance services similar to DPSA’s, but, in many cases,
it can provide more enhanced services than DPSA can. For ex-ample,
75 percent of private providers in Arizona use helicopters
that are more powerful than DPSA’s helicopters, allowing them
to carry greater patient loads. Private providers also regularly
staff their ambulance crews with two medical personnel, usually
a paramedic and flight nurse. Only two of DPSA’s four air rescue
units regularly staff their crews with two medical personnel, and
only one of those two units utilizes a flight nurse.
Despite private air ambulance industry growth, DPSA continues
to operate as a primary provider, offering costly services that
private air ambulance providers could provide. Several factors
encourage DPSA to continue operating as a primary provider.
n First, although DPSA has a policy intended to discourage
competition with the private sector, the policy does not effec-tively
discourage DPSA from taking calls the private sector
could take.
n Second, emergency-response dispatching practices favor
DPSA.
n Finally, DPSA has the ability to respond to an accident with-out
being formally dispatched or without confirming the
need for an air ambulance. When utilized, this practice gives
DPSA a competitive advantage over private providers be-cause
when an air ambulance is needed, DPSA is more likely
to be closer to the scene. However, this practice can be costly
when an air ambulance is not needed. During fiscal year
1999, 43 percent of DPSA’s emergency medical missions
ended in cancellation because an air ambulance was not
needed. Other states’ police agencies and private air ambu-lance
providers generally do not proceed to an accident
without formal dispatch and consequently reported much
lower cancellation rates.
Summary
iii
OFFICE OF THE AUDITOR GENERAL
Although DPSA defends its continued provision of air ambu-lance
services as a primary provider, its services are costly. The
Air Rescue Units cost about $1,081 per flight hour to operate and
maintain. Last year, DPSA flew 678 hours on medical missions,
costing the State about $733,000. Further, DPSA does not recu-perate
any of these costs because, unlike the private sector, DPSA
does not charge for its air ambulance services.
To ensure DPSA’s resources are used where needed most, DPSA
should act as a backup air ambulance provider, providing serv-ices
only when the private sector is unavailable or unable to re-spond
in a timely manner. By serving as backup provider, DPSA
can focus its efforts on providing search-and-rescue and law
enforcement services because many entities, such as county
sheriff’s offices, rely on DPSA to provide aerial support for these
services.
DPSA Needs More Powerful
Helicopters to Conduct Some Missions
(See pages 19 through 24)
DPSA uses helicopters primarily to conduct air ambulance,
search-and-rescue, and law enforcement missions. Its fiscal year
1999 fleet consisted of four single-engine Bell 206 helicopters.
Historically, these helicopters have not been powerful enough to
conduct some of DPSA’s missions safely and efficiently. As early
as 1989, an aviation consultant found DPSA’s helicopters to be
underpowered. DPSA continues to struggle with these power
limitations by sometimes leaving behind equipment, staff, and
fuel to accommodate patient loads. However, other entities, such
as the Maryland State Police and private sector companies, which
offer similar services, use more powerful helicopters. In fact, 75
percent of Arizona’s private air ambulance providers use heli-copters
that are more powerful than DPSA’s helicopters.
To make its fleet of helicopters safe and efficient, DPSA will need
additional funding to purchase up to three more powerful heli-copters.
Although DPSA recently purchased or is in the process of
purchasing two new, more powerful single-engine helicopters
(Bell 407s) to replace some of its current fleet, additional replace-ment
helicopters will be needed. Because the cost of replacing and
Summary
iv
OFFICE OF THE AUDITOR GENERAL
upgrading its helicopters will be significant, DPSA will need to
seek an increase in its General Fund appropriation to address any
equipment replacement needs.
However, DPSA should continue to research the feasibility of
using other monies to help offset a portion of its helicopter re-placement
costs. For example, DPSA used Racketeering Influ-enced
Corrupt Organization (RICO) monies to offset the costs of
an airplane in the past. The Department is eligible to receive RICO
monies when it participates in investigations of state or federal
racketeering crimes that result in forfeitures. However, relying on
RICO monies as a primary funding source would be difficult since
there are restrictive guidelines for their use and the amount of
monies available from year to year varies.
DPSA Not Charging Enough
to Support Air Transport Activities
(See pages 25 through 30)
DPSA does not charge enough for its air transport services to
cover the cost of providing this service to other governmental
entities. DPSA’s cost-recovery model—its method for determining
what to charge for the air transport services it provides—captures
only a small percentage of the costs associated with providing this
service. DPSA’s model includes only the costs for pilot overtime,
maintenance (labor and parts) and fuel. In contrast, the cost-recovery
model that federal agencies use includes many more
categories, such as crew costs (salaries, benefits, training, etc.),
insurance, and depreciation. If DPSA were to compute its rates
using the federal model developed by the United States Office of
Management and Budget (OMB), its rates would be much higher
and its reimbursements would almost triple. Specifically, in fiscal
year 1999, using full-cost rates, DPSA would have received
$111,085 instead of only $37,261.
Although problems with DPSA’s cost model were identified as
early as 1992, DPSA has not significantly altered its model to more
fully recover costs. To ensure that it charges sufficiently to cover its
air transport expenses, DPSA should adopt a more comprehen-sive
cost model that includes all the elements in the OMB’s full
cost-recovery model.
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OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS
Page
Introduction and Background ......................... 1
Finding I: DPSA Should Serve As
Backup Air Ambulance Provider
to the Private Sector .................................... 9
The Need for DPSA
Air Ambulance Services
Has Decreased ................................................................ 9
Despite Industry Growth,
DPSA Continues As a
Primary Provider............................................................ 10
Serving As a Backup Provider Would
Free up Resources for Other Missions ........................... 13
Recommendations .......................................................... 17
Finding II: DPSA Needs More
Powerful Helicopters to
Conduct Some Missions ............................. 19
Underpowered Helicopters a
Continual Problem for DPSA......................................... 19
Additional Resources
Needed to Replace Old,
Underpowered Helicopters ........................................... 22
Recommendations .......................................................... 24
Table of Contents
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OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (cont’d)
Page
Finding III: DPSA Not Charging
Enough to Support Air
Transport Activities...................................... 25
DPSA Can Charge for
Many Air Transport Services ......................................... 25
DPSA Cost-Recovery Model
Does Not Reflect True Costs .......................................... 25
DPSA Needs to Adopt
Better Model.................................................................... 29
Recommendations .......................................................... 30
Agency Response
Photos
Photo 1 DPSA’s Twin-engine King Air E-90................... 2
Photo 2 Single-engine Bell 206 helicopter
in maintenance hangar ....................................... 20
Photo 3 Cessna 210 sometimes used for air
transport flights................................................... 26
Table of Contents
vii
OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (concl’d)
Page
Tables and Figures
Table 1 Department of Public Safety—
Aviation Section
Statement of Revenues, Expenditures,
and Changes in Fund Balance
Years Ended or Ending
June 30, 1998, 1999, and 2000
(Unaudited)......................................................... 5
Table 2 Department of Public Safety—
Aviation Section
Summary of Age and Flight Hours for
Bell 206 Helicopters
As of December 1, 1999 ...................................... 23
Table 3 Department of Public Safety—
Aviation Section
The United States Office of Management
and Budget’s Full Cost-Recovery Model
As of May 22, 1992.............................................. 27
Figure 1 Department of Public Safety—
Aviation Section
Comparison of Primary Helicopter Missions
Flown by Type and Regional Unit
Year Ended June 30, 1999................................... 4
Figure 2 Department of Public Safety—
Aviation Section
Comparison of Department’s Hourly
Aircraft Rates to Full-Cost Hourly Rates
Year Ended June 30, 1999................................... 28
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OFFICE OF THE AUDITOR GENERAL
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1
OFFICE OF THE AUDITOR GENERAL
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance
audit of the Department of Public Safety’s Aviation Section as
part of a Sunset review of the agency. This audit was conducted
pursuant to a June 16, 1999, resolution of the Joint Legislative
Audit Committee. This audit was conducted under the authority
vested in the Auditor General by Arizona Revised Statutes §§41-
2951 through 41-2958. This is the first of several audits of the
Department of Public Safety.
Aviation Section Provides
a Variety of Services
The Department of Public Safety Aviation Section (DPSA) is part
of the Highway Patrol Division, which enforces Arizona’s traffic
and criminal laws and federal commercial vehicle regulations on
state and federal highways.1 DPSA provides a variety of services
using both airplanes and helicopters. These services include the
following:
n Air transport—The Aviation Section uses its airplanes to
help the Department fulfill its statutory mandate to provide
transportation and protection for the Governor. DPSA also
transports Department staff and makes its planes available to
other state agencies through intergovernmental agreements
for air charter services.
n Air ambulance—Once the only air ambulance service in the
State, DPSA still provides this service, administering on-site
medical help and using its helicopters to transport sick or in-jured
people for treatment.
1 The Aviation Section was transferred from the Criminal Justice Support
Division to the Highway Patrol Division effective April 1, 2000.
Introduction and Background
2
OFFICE OF THE AUDITOR GENERAL
n Search and rescue—These activities involve searching for
downed airplanes, assisting stranded boaters, or rescuing
injured hikers. Numerous first-responder agencies such as
fire departments and county sheriff’s offices rely on DPSA for
technical rescue and search-and-rescue assistance.
n Law enforcement—DPSA supports federal, state, and local
law enforcement agencies with activities such as aerial pur-suits
and surveillance.
Organization, Equipment,
and Staffing
DPSA employs 54 full-time staff and provides its airplane and
helicopter services from several locations across the State.
n Administration and airplane services (9 FTEs)—The
Aviation Section’s administrative office and airplane services
are located in Phoenix at the Sky Harbor International Air-port.
A commander, assisted by two support staff, adminis-ters
the program. Airplane services includes three pilots, two
mechanics, and a supply specialist (vacant). They operate
and maintain four airplanes—two single-engine planes ca-pable
of carrying a pilot and three or four passengers, and
two twin-engine aircraft capable of carrying nine to ten pas-
Photo 1: DPSA’s Twin-engine King Air E-90
DPSA uses this King Air for executive air transport.
Introduction and Background
3
OFFICE OF THE AUDITOR GENERAL
sengers in addition to the pilots. During fiscal year 1999, the
airplane crew flew 368 flights. The majority of these flights
(57 percent) provided transportation to the Governor and her
staff, Department of Public Safety officials, or other state
agency personnel. The airplane crew also participated in
some law enforcement missions, such as aerial surveillance of
Arizona’s highways and transporting investigators to crime
scenes.
n Helicopter services (45 FTEs)—DPSA’s helicopter services
are provided from four regional Air Rescue Units: Central
Air Rescue in Phoenix, Northern Air Rescue in Flagstaff,
Southern Air Rescue in Tucson, and Western Air Rescue in
Kingman. The Air Rescue Units include 23 pilots, 19 para-medics,
and 3 mechanics. A pilot and paramedic are always
on duty at each of the four units to provide air ambulance,
search-and-rescue, or law enforcement services. DPSA has
one single-engine helicopter stationed at each of the four air
rescue units. When a unit’s helicopter is undergoing mainte-nance
or repair work, another unit will cover its missions.
DPSA’s fifth helicopter is being completed with the necessary
equipment. When completed, it will allow one of the existing
helicopters to serve as a spare for use when a unit’s helicopter
is undergoing maintenance. The four rescue units flew 3,284
missions during fiscal year 1999.1
Figure 1 (see page 4) depicts the top three helicopter mission
categories (air ambulance, law enforcement, and search and
rescue) by regional unit. These missions account for about two-thirds
(or 2,260) of DPSA’s 3,284 helicopter missions flown in
fiscal year 1999. The remaining missions encompass flights for
training, maintenance, public education, and other miscellaneous
duties. As illustrated in this chart, the number and type of mis-sions
performed varies by regional unit. For example, the Central
Air Rescue unit performed the most law enforcement missions
(300 of 848) and the Western Air Rescue has the most air ambu-lance
missions (436 of 990) during fiscal year 1999.
1 Although DPSA helicopter mission logs show that 3,673 missions were
requested, only 3,284 of these missions have flight time because some
were canceled before departure.
Introduction and Background
4
OFFICE OF THE AUDITOR GENERAL
Budget
DPSA received $5.1 million in General Fund monies for fiscal
year 1999 (see Table 1, page 5). The program expends the major-ity
of its monies on salaries. During fiscal year 1999, the program
received $1,050,000 toward the purchase of a new helicopter, and
during fiscal year 2000, the program received $600,000 for the
first of three lease payments on a second new helicopter. Both
helicopters cost approximately $1.5 million after DPSA was
credited about $500,000 each for trade-in helicopters.
DPSA also bills other state agencies for air charter services (see
Finding III, pages 25 through 30), and is eligible to receive reim-bursement
for search-and-rescue operations. During fiscal year
1999, the Department received $94,828 for its air charter and
search-and-rescue services.
Figure 1
Department of Public Safety—Aviation Section
Comparison of Primary Helicopter Missions Flown by Type and Regional Unit
Year Ended June 30, 1999
Source: Auditor General staff analysis of mission data from the Aviation Section’s Alpha IV rotary-wing
database for the year ended June 30, 1999.
140
300
114
287
126
82
127
259
147
436
163
79
0
50
100
150
200
250
300
350
400
450
Number of Missions Flown
Central Northern Southern Western
Air Ambulance Law Enforcement Search and Rescue
Introduction and Background
5
OFFICE OF THE AUDITOR GENERAL
Audit Scope
and Methodology
The audit focused on DPSA’s need to provide air ambulance
services and its ability to perform its missions safely and effi-ciently.
Competition with private-sector air ambulance operators
Table 1
Department of Public Safety—Aviation Section
Statement of Revenues, Expenditures, and Changes in Fund Balance 1
Years Ended or Ending June 30, 1998, 1999, and 2000
(Unaudited)
1998 1999 2000
(Actual) (Actual) (Estimated)
Revenues:
State General Fund appropriations 2 $3,740,200 $5,114,100 $4,514,300
Intergovernmental 149,388 95,671 100,000
Total revenues 3,889,588 5,209,771 4,614,300
Expenditures:
Personal services 2,431,778 2,452,387 2,533,200
Employee related 460,053 476,899 506,600
Professional and outside services 45,010 29,623 18,500
Travel, in-state 19,993 20,846 17,500
Travel, out-of-state 14,377 38,037 8,500
Aid to organizations 180
Other operating 909,439 835,732 930,000
Equipment 2 8,204 1,017,297 820,000
Total expenditures 3,889,034 4,870,821 4,834,300
Excess of revenues over (under) expenditures 554 338,950 (220,000)
Reversions to the State General Fund 13 118,950     
Excess of revenues over (under) expenditures
and reversions to the State General Fund 541 220,000 (220,000)
Fund balance (deficit), beginning of year (541)      220,000
Fund balance, end of year $ 0 $ 220,000 $ 0
1 The Department calculated the Aviation Section’s revenues and expenditures by allocating revenues and expenditures
recorded in the Department’s Joint Account. The Joint Account is a commingled account primarily funded from State
General Fund appropriations and other appropriated monies, such as Criminal Justice Enhancement monies.
2 The Department received appropriations of $1,050,000 in 1999 and $600,000 in 2000 toward the purchase of additional
helicopters, including necessary modifications. The helicopter payments are included in the equipment expenditures. In
addition, the estimated equipment expenditures in 2000 include $220,000 to complete necessary modifications to one of
the new helicopters.
Source: Auditor General staff analysis of financial information provided by the Department of Public Safety.
Introduction and Background
6
OFFICE OF THE AUDITOR GENERAL
has been noted in previous reports discussing the Aviation Sec-tion.
1 However, audit work was completed to assess the ongoing
need for DPSA to provide air ambulance services and included
such steps as the following:
n Interviewing private air ambulance providers and emer-gency
response agencies such as fire departments to assess
DPSA’s current role and the need for DPSA’s continued in-volvement.
n Contacting private providers to determine the stability of the
industry, future availability of their services, and coverage
throughout the State.
n Reviewing helicopter mission logs from DPSA’s Central and
Northern Air Rescue Units and the State’s four major private
providers to determine whether the private sector could have
responded to the air ambulance calls taken by these two
DPSA units during August and September 1999.2
n Surveying 22 other states to determine if their state police
agencies provided aviation services similar to DPSA’s.3
Audit work conducted to assess the safety and efficiency of
DPSA’s missions included the following:
1 Office of the Auditor General (Report No. 91-2), April 1991 and the State
of Arizona’s Project S.L.I.M. Report on the Department of Public Safety, July
1992.
2 The analysis excluded two DPSA air ambulance missions because these
missions were not included in its database even though they were re-corded
on its mission logs.
3 Eighteen states were selected because, similar to Arizona, they have large
amounts of public lands or natural areas over which services must be
provided: Alaska, California, Colorado, Florida, Idaho, Illinois, Maine,
Maryland, Montana, Nevada, New Mexico, North Carolina, Oregon,
Tennessee, Texas, Utah, Washington, and Wyoming. Four additional
states were selected based on referrals from interview sources because
they had state police agencies that provided air ambulance services:
Delaware, New Jersey, New York, and Virginia.
Introduction and Background
7
OFFICE OF THE AUDITOR GENERAL
n Reviewing regulations promulgated by the Federal Aviation
Administration (FAA) and interviewing FAA personnel to
determine the safety and operating standards that apply to
DPSA.
n Reviewing complaints and insurance claims against DPSA.
n Comparing DPSA’s method for setting reimbursement rates
for its air charter services with a cost model developed by the
U.S. Office of Management and Budget and used by federal
agencies to determine what costs to recover.
n Surveying county officials to assess their use of DPSA for
search-and-rescue missions.
n Reviewing the type of helicopters used by other agencies
providing similar services to obtain a range of equipment
and costs associated with emergency missions.
This report presents findings and recommendations in three
areas:
n The need for DPSA to serve as a backup provider for air am-bulance
services, providing services only when private air
ambulance companies are unavailable or unable to provide
timely service.
n The need for DPSA to replace some of its helicopter fleet to
ensure that it can safely and efficiently perform its missions.
n The need for DPSA to improve its cost model for its air
transport services.
The audit was conducted in accordance with government
auditing standards.
The Auditor General and staff express appreciation to the Di-rector
and staff of the Arizona Department of Public Safety for
their cooperation and assistance during the course of the audit.
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OFFICE OF THE AUDITOR GENERAL
FINDING I DPSA SHOULD SERVE AS
BACKUP AIR AMBULANCE
PROVIDER TO THE
PRIVATE SECTOR
DPSA is no longer needed as a primary air ambulance provider
in many parts of the State. Because the private air ambulance
industry has grown steadily in recent years, the need for DPSA
to provide air ambulance services has decreased. Currently, the
private sector could handle many of the air ambulance missions
DPSA takes. To ensure that DPSA meets the State’s current
needs, it should serve as a backup to private air ambulance pro-viders,
providing service only when the private sector is un-available
or unable to respond timely. By providing backup air
ambulance services only, DPSA will be able to expand its search-and-
rescue and law enforcement services.
The Need for DPSA
Air Ambulance Services
Has Decreased
Although DPSA was initially the sole provider of air ambulance
services in the State, the need for its services has decreased as the
private air ambulance industry has expanded. Air ambulance
services are considered to be a vital part of Arizona’s emergency
response system. They can improve the chances of survival,
especially in rural or remote areas, by providing patients with
rapid advanced medical treatment and transport. In 1972, when
DPSA began offering air ambulance services, it was the sole pro-vider
of these services and had only two helicopters to cover the
State. Today, however, in addition to DPSA, there are 12 private
air ambulance providers, operating 28 helicopter air ambulances.
In addition, several private providers from California, Nevada,
and New Mexico respond to calls in Arizona along state borders.
Together, these services cover most parts of the State. In addition,
industry growth in recent years has been particularly significant.
Finding I
10
OFFICE OF THE AUDITOR GENERAL
For example, among the four major private providers alone, the
number of helicopter air ambulances in operation has grown 47
percent since 1997.
The private sector not only offers air ambulance services similar
to DPSA’s; in many cases, it can also provide more enhanced
services than DPSA can. For example, 75 percent of private pro-viders
in Arizona use helicopters that are more powerful than
DPSA’s helicopters. Typically, more powerful aircraft are better
equipped to handle heavy patient loads and high altitudes, such
as those in northern Arizona. Private providers also regularly
staff their ambulance crews with two medical personnel, usually
a paramedic and flight nurse. Two medical crewmembers can
more easily handle the multiple tasks involved in providing
emergency medical care, especially if there are two patients on
board. Furthermore, while both paramedics and flight nurses are
capable of providing advanced life support, flight nurses are
authorized to perform a broader range of medical procedures,
including administering certain medications. Only two of
DPSA’s four air rescue units regularly staff their crews with two
medical personnel, and only one of those two units utilizes a
flight nurse.
Despite Industry Growth,
DPSA Continues As a
Primary Provider
Although DPSA has reduced some services in response to pri-vate
sector expansion, it continues to serve as a primary provider
offering services that private air ambulance companies could
provide. Several factors, including internal practices and ambu-lance
dispatching practices, encourage DPSA to continue oper-ating
as a primary provider. This continued service is costly for
the State.
Private sector could take many calls DPSA currently takes—
Although DPSA has reduced its interfacility transport services
(the transport of sick or injured patients between care facilities) in
response to private sector expansion, DPSA continues to respond
to many medical emergencies the private sector could handle.
For example, auditors reviewed the helicopter mission logs from
Finding I
11
OFFICE OF THE AUDITOR GENERAL
DPSA’s Central and Northern Air Rescue Units and the State’s
four major private providers to determine whether the private
sector could have responded to the air ambulance calls taken by
these two DPSA units during August and September 1999. The
review revealed that private providers could have taken many of
the medical calls DPSA took during this time. For example, the
private sector was available and could have responded to 100
percent of the 26 medical missions taken by DPSA’s Central Air
Rescue (located in metropolitan Phoenix). In many cases, more
than one private provider was available. In Flagstaff, the private
sector was available to respond to 64 percent of DPSA’s North-ern
Air Rescue’s 79 medical missions.1
Several factors encourage DPSA to continue operating as a pri-mary
provider—DPSA continues to operate as a primary pro-vider
for several reasons.
n Crew response policy—Although a DPS official indicated
that its crew response policy is intended to discourage com-petition
with the private sector, auditors found that the policy
does not effectively prevent DPSA from taking calls the pri-vate
sector could take.2 For example, the policy states that
when an Air Rescue crew is committed to a previous or on-going
mission, it should defer the call first to other DPSA Air
Rescue Units before deferring the call to other service provid-ers.
Furthermore, the policy requires that private providers
be not only available but also airborne before DPSA can defer
a call to them. Yet, because private providers await formal
dispatching, they are less likely than DPSA to be airborne
when a request is made, reducing the chances that DPSA will
defer a call to them when it receives a request for service.
1 The Southern and Western Air Rescue Units, located in Tucson and
Kingman, were not included in the analysis. Including these units would
not have allowed for a comparable analysis. The Southern Air Rescue
Unit is on a rotational dispatching list and, therefore, is less likely to take
calls the private sector could handle. Furthermore, the Western Air Res-cue
Unit’s closest private provider is in another city, which makes a dif-ference
in who is dispatched since response time is a determining factor.
2 DPSA can provide air ambulance services even though private sector
companies exist because DPSA is exempt from state regulation prohib-iting
public-private competition.
Finding I
12
OFFICE OF THE AUDITOR GENERAL
n Emergency response dispatching practices—Emergency
response dispatching practices favor DPSA. When Arizona’s
Emergency Medical Services Communication System
(EMSCOM)1 receives a call about an emergency, it sends the
closest available helicopter, be it public or private. However,
if a DPSA helicopter is specifically requested, EMSCOM will
often comply with the request even when a private provider
is available to respond. Although not formally tracked, spe-cific
requests for DPSA are common, especially from DPS
Highway Patrol. Other requesting agencies, such as some
sheriff’s offices and fire departments, also commonly request
DPSA. The preference for DPSA appears to be due, in part, to
the feeling of affiliation between law enforcement and other
civil agencies and DPSA.
n Response practices—DPSA has the ability to respond to
calls, even when the need for an air ambulance is uncertain at
the time of launching. In some cases, this can result in DPSA
initiating a response to medical emergencies even when it
has not been formally dispatched. This practice, called
“launching off the scanner,” occurs when DPSA Air Rescue
crews hear of emergencies on the radio and initiate a re-sponse
without waiting for a formal request or knowing for
certain that an air ambulance will be needed. The ability to
launch at will gives DPSA an advantage over private provid-ers
since the prevailing dispatching standard is to utilize the
closest medical help available. Although private providers
may be available at their bases, DPSA is more likely to be
utilized because it is already airborne and closer to the scene.
DPSA’s provision of air ambulance services is expensive—Al-though
DPSA defends its continued provision of air ambulance
services, its services are costly to the State. DPSA justifies its on-going
provision of air ambulance services and specifically, its
response practices by arguing that its Air Rescue crews, as both
law enforcement and air ambulance providers, can assist in other
capacities if not needed for emergency medical services. DPSA
further argues that it would rather respond and turn back if not
1 The Department of Public Safety, Operational Communications Section
operates the Emergency Medical Services Communication System.
Finding I
13
OFFICE OF THE AUDITOR GENERAL
needed than delay response until the need is confirmed. How-ever,
DPSA’s services are expensive to provide. The Air Rescue
Units cost about $1,081 per flight hour to operate and maintain.1
Last year, DPSA flew 678 hours on medical missions, costing the
State about $733,000. This expenditure is considerable given that
DPSA does not recuperate any costs because its services are free
to the public. The private sector charges between $2,000 to $4,000
for an air ambulance mission.
DPSA’s response practices are also costly. The costs associated
with launching off the scanner can be significant when many
responses result in cancellation. In fiscal year 1999, for instance,
43 percent of DPSA responses to emergency medical calls ended
in cancellations while en route or at the scene because an air
ambulance was not needed. These canceled air ambulance mis-sions
cost the State about $179,000 in operating costs. Other
states’ police agencies providing air ambulances reported that
they usually do not launch off the scanner. Furthermore, private
providers do not regularly launch off the scanner because they
receive no payment if a flight is canceled. In contrast to DPSA,
the private sector has cancellation rates of around 5 percent.
Serving as a Backup Provider
Would Free up Resources
for Other Missions
Because the need for DPSA’s air ambulance services has de-creased
and its services are costly, DPSA should act as a backup
air ambulance provider only. By providing backup services only,
DPSA will be more available to respond to search-and-rescue
and law enforcement calls.
DPSA should provide backup air ambulance service only—Be-cause
the need for DPSA as a primary air ambulance provider
1 Operating costs for the Air Rescue Units were determined by totaling all
costs including crew and mechanic salaries, maintenance parts, fuel, op-erations
overhead, rent, and insurance, and dividing by the number of
hours flown annually. Depreciation was not included because the heli-copters
it operated during fiscal year 1999 would be fully depreciated
due to their age.
Finding I
14
OFFICE OF THE AUDITOR GENERAL
has decreased in many parts of the State, DPSA should act as a
backup provider only. In fact, very few state police agencies
provide air ambulance services. In a review of 22 other states,
auditors found only 6 states whose police agency regularly pro-vides
air ambulance services.1 Furthermore, unlike DPSA, the 6
police agencies operate as either the sole air ambulance provider
(Delaware, Maryland, and New Jersey) or as a limited provider
filling gaps in coverage or sharing service according to specific
coordination agreements with the private sector (California,
New York, Virginia).
DPSA is needed as a backup air ambulance provider because the
private sector alone may not currently be able to provide full
coverage for the State or may need help when multiple-injury
accidents occur. Rural areas of the State, such as those in north-western
Arizona, still rely heavily on DPSA. The remoteness of
these areas makes air medical transport a necessity. Yet, because
these areas have resident populations that are less likely to have
health insurance or be able to afford private air ambulance serv-ice,
private providers operate less frequently in these areas. Even
in urban areas with a greater number of providers, DPSA may
still be needed to fill gaps in coverage when private providers
are unavailable. Furthermore, DPSA may be needed temporarily
in other areas if a private provider leaves the industry.
DPSA management has expressed concern that if DPSA is a
backup air ambulance provider only, its Air Rescue medical
crews will lose their proficiency due to the reduction in the
medical missions they will handle. However, several factors can
minimize any loss in skills. As backup providers, crewmembers
will continue to respond to medical missions, albeit less fre-quently.
In addition, they can utilize their skills on search-and-rescue
and law enforcement missions as needed. Finally, con-tinuing
education courses, which they are already required to
take to keep their medical certifications current, can help maintain
skills.
1 The 22 states reviewed include Alaska, California, Colorado, Delaware,
Florida, Idaho, Illinois, Maine, Maryland, Montana, Nevada, New Jersey,
New Mexico, New York, North Carolina, Oregon, Tennessee, Texas,
Utah, Virginia, Washington, and Wyoming.
Finding I
15
OFFICE OF THE AUDITOR GENERAL
DPSA should expand its search-and-rescue and law enforcement
services—By providing backup air ambulance services only,
DPSA will be able to increase its search-and-rescue and law en-forcement
services. Search-and-rescue services include activities
such as searching for downed airplanes, assisting stranded boat-ers,
or rescuing injured hikers from steep canyons. Numerous
first-responder agencies, such as fire departments and county
sheriff’s offices, depend on DPSA for aerial support in search-and-rescue
activities. Specifically, 14 of Arizona’s 15 counties rely on
DPSA for search-and-rescue assistance.1 Although all counties are
statutorily responsible for search-and-rescue activities, only 4 have
some aviation resources.2 In Arizona, DPSA is a primary search-and-
rescue provider because it is one of the few with aerial capa-bility
and the only entity that consistently offers emergency medi-cal
services (paramedics) simultaneously. Furthermore, DPSA has
special search tools that other agencies do not have, including
Forward-Looking Infra Red (FLIR) equipment, which helps locate
ground objects by identifying heat sources, and night vision gog-gles,
which improve visibility during night searches. Because
DPSA handles many air ambulance calls, it may not always be
available for search-and-rescue missions. Although DPSA does
not track missions declined due to unavailability, several counties
reported that DPSA has sometimes been unavailable and that they
have had to rely on alternate providers with fewer resources.
In addition to expanding its search-and-rescue services, DPSA
could increase its law enforcement missions to help meet the de-mand
for aerial law enforcement support. Law enforcement is
DPSA’s second most common mission type, comprising ap-proximately
one-fifth of all its missions in fiscal year 1999, and
may include aerial pursuits, traffic observation, and personnel
transport (transporting a tactical team, such as a SWAT team, to a
crime scene). In providing aerial law enforcement services, DPSA
supports the efforts of other DPS sections and other law enforce-ment
agencies, few of which, particularly in rural areas, have their
own aviation resources. Even those that do, such as the Maricopa
1 Yuma County does not utilize DPSA’s search-and-rescue services. It
utilizes the Marine Corps Air Station, which is closer to Yuma than
DPSA is.
2 La Paz, Maricopa, Mohave, and Yuma.
Finding I
16
OFFICE OF THE AUDITOR GENERAL
County Sheriff’s Office, sometimes rely on DPSA for backup as-sistance.
Furthermore, few agencies have some of the specialized
tools that DPSA has. DPSA’s FLIR equipment and night vision
goggles, for instance, may also be used on law enforcement mis-sions,
such as aerial pursuits. Due to its enhanced capability,
DPSA frequently receives calls for assistance from other law en-forcement
agencies. In fact, in fiscal year 1999, 53 percent of
DPSA’s law enforcement missions supported other agencies’
efforts.
Changes are needed to ensure DPSA meets the State’s current
needs—To ensure that DPSA’s limited resources are directed to
where they are needed most, DPSA will have to make some
changes.
n First, DPSA should rewrite its mission statement to change its
role in air ambulance services to that of a backup provider.
DPSA should provide air ambulance services only when the
private sector is unavailable or unable to provide timely serv-ice.
n Second, DPS should work to eliminate dispatching practices
that favor DPSA. Specifically, DPS should establish a policy or
written directive to be used by EMSCOM that states that
DPSA serves as a backup air ambulance provider. The policy
or directive should further indicate that private providers are
contacted first and DPSA is contacted only if private providers
are unavailable or unable to provide timely service. Request-ing
agencies (fire departments, ground ambulance companies,
and sheriff’s offices) should be provided a copy of this new
policy.
n Finally, DPSA should ensure that its Air Rescue Units do not
launch off the scanner. Specifically, DPSA should establish a
written policy that states that Air Rescue Units should initiate
flights only when they are formally dispatched. All Air Rescue
Units should be provided a copy of this policy.
Once DPSA redirects its efforts to search and rescue and law en-forcement,
further assessment of its resources may be needed.
Although DPSA plays an important role in these two areas, the
level of resources needed will not be clear until it readjusts its role
Finding I
17
OFFICE OF THE AUDITOR GENERAL
in air ambulance to that of a backup provider. Therefore, after
making the recommended changes, DPSA should assess whether
its services are sufficiently utilized to warrant the present level of
resources.
Recommendations
1. DPSA should rewrite its mission statement to change its role
in air ambulance services to that of a backup provider unless
the private sector is unavailable or unable to respond in a
timely manner..
2. DPSA should work to eliminate dispatching practices that
favor DPSA. Specifically, DPS should establish a written policy
to be used by EMSCOM that states that private providers are
to be contacted first and that DPSA is to be contacted only if
private providers are unavailable or unable to provide timely
service. Requesting agencies (fire departments, ground am-bulances
and sheriff’s offices, etc.) should be provided a copy
of this new policy.
3. DPSA should seek to ensure that the practice of “launching off
the scanner” does not occur. Specifically, DPSA should estab-lish
a written policy stating that this practice is not appropriate
and that staff should not initiate a flight without first verifying
the need for an emergency helicopter. All air units should be
provided a copy of this policy.
4. After implementing the other recommendations, DPSA
should assess whether its services are used enough to warrant
the present level of resources, and if not, how to reduce un-warranted
expenditures.
18
OFFICE OF THE AUDITOR GENERAL
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19
OFFICE OF THE AUDITOR GENERAL
FINDING II DPSA NEEDS MORE
POWERFUL HELICOPTERS TO
CONDUCT SOME MISSIONS
DPSA needs more powerful helicopters to perform some of its
missions adequately. DPSA uses helicopters primarily to con-duct
air ambulance, search-and-rescue, and law enforcement
missions. However, for more than ten years, DPSA’s helicopters
have not been powerful enough to conduct some of these mis-sions
safely and efficiently. For example, DPSA’s crews some-times
must leave behind equipment, staff, and fuel to accommo-date
greater patient loads. Although DPSA recently purchased
two more powerful helicopters, additional resources will be
needed to address the replacement of the remaining underpow-ered
helicopters.
Underpowered Helicopters a
Continual Problem for DPSA
DPSA has been using underpowered helicopters for many years.
As early as 1989, a consultant found DPSA’s helicopters inade-quate
for performing some missions safely. Specifically, using
underpowered aircraft can result in delayed medical treatment
and unsafe flights. In contrast, other entities use more powerful
helicopters to complete similar missions.
DPSA continues to use underpowered helicopters—DPSA has
historically used helicopters that are not powerful enough to
conduct some of its air ambulance and air search-and-rescue
missions safely or efficiently. DPSA’s fiscal year 1999 helicopter
fleet consisted of five single-engine Bell 206 helicopters. These
helicopters were found to be underpowered as early as 1989 by a
private aviation consulting firm. Specifically, this firm deter-mined
that DPSA’s helicopters do “not have the power and ca-pability
to safely land, takeoff and perform its primary mission
over much of the terrain in which it operates. High density alti-tudes,
high desert temperatures, gusty winds, heavy payloads
Finding II
20
OFFICE OF THE AUDITOR GENERAL
and a variety of conditions places the aircrews and aircraft in
jeopardy on many flights.”1 A 1991 Auditor General Report (No.
91-2) also identified similar aircraft deficiencies.
n Underpowered helicopters can result in unsafe and ineffi-cient
flights—Because of its aircraft’s limitations, DPSA can-not
always carry the equipment, staff, and fuel needed to
complete some of its missions safely and in a timely manner.
To compensate for the lack of power, DPSA sometimes
leaves equipment, staff, or fuel behind to accommodate
greater patient loads. For example, the Central Air Rescue
unit, located in Phoenix, regularly uses only about half of its
fuel capacity so that it can adequately carry the weight of
patients, medical equipment, and crew. However, some-times
even these actions do not help. For example, even with
reduced loads, sometimes DPSA must decline missions that
require transporting patient loads weighing over 350 lbs.,
1 The higher the density altitude, the thinner the air becomes. As such, the
aircraft’s engine, propeller, and wings must work harder to produce an
equal amount of power and lift.
Photo 2: Single-engine Bell 206 helicopter in
maintenance hangar
The Bell 206 helicopter is underpowered for some of DPSA’s missions.
Finding II
21
OFFICE OF THE AUDITOR GENERAL
even with reduced loads. Further, operating with reduced
fuel can cause a need for more frequent refuelings, which in
turn can lengthen missions and delay patient care.
Other entities use more powerful helicopters for similar mis-sions—
Other entities surveyed for this audit use more powerful
aircraft to conduct similar missions. Few states’ police agencies
are involved in providing air ambulance services. However, the
Maryland State Police, who conduct similar missions, use more
powerful helicopters. After three fatal crashes, Maryland sought
safer helicopters that were more appropriate for the type of mis-sions
it conducts. It switched from single-engine Bell helicopters
to twin-engine helicopters in the mid-1980’s.
The private sector also uses more powerful helicopters to pro-vide
similar services. Seventy-five percent of Arizona’s private
air ambulance providers use more powerful helicopters than
DPSA. In addition, if private providers conduct “external load”
operations, federal aviation regulations require them to use
powerful twin-engine aircraft to increase the safety margin of
these high-risk flights. External load operations are sometimes
necessary when DPSA conducts air rescue flights (for example,
rescuing a stranded mountain climber). During these operations,
DPSA removes the doors of the helicopter and attaches a long
rope to the aircraft. The victim is then attached to the end of the
rope and remains swinging below until the helicopter arrives at a
safe place to set the victim down. While DPSA will not perform
any operations it feels are unsafe, federal aviation regulations
require twin-engine aircraft for similar operations if performed
by commercial operations.1
1 DPSA is exempt from most federal aviation regulations applicable to
private and commercial aircraft because it operates publicly owned air-craft.
Finding II
22
OFFICE OF THE AUDITOR GENERAL
Additional Resources
Needed to Replace Old,
Underpowered Helicopters
To make its fleet of helicopters safe and efficient, DPSA will need
additional funding to purchase up to three more powerful heli-copters.
Even though DPSA will have received two newer, more
powerful helicopters by the end of fiscal year 2000, it will still
have three remaining Bell 206 helicopters. Because DPSA is sup-ported
by the General Fund, it will need to seek an increase in its
appropriation to cover the cost of any new helicopters. However,
because the cost for replacing and upgrading its helicopters is so
significant, the DPSA should also research the feasibility of using
other monies to help offset the costs.
Further upgrades needed—Although the DPSA has long ac-knowledged
the need for better helicopters, due to state and
Department budget constraints over the past several years, it
has only recently begun to upgrade its fleet. DPSA has pur-chased
a more powerful Bell 407 single-engine helicopter, and
is in the process of purchasing another to replace some of its
older, less powerful Bell 206 helicopters. It placed one of these
new helicopters at the Northern Air Rescue Unit in Flagstaff in
October 1999. The second new helicopter is being completed
with the necessary equipment to make it operational, and
DPSA expects it to be ready for use by May 2000. When ready,
this helicopter will replace the Central Air Rescue Unit’s heli-copter,
allowing the older, existing aircraft to serve as a spare
when the other helicopters are undergoing maintenance. These
new 407 helicopters represent an increase in horsepower from
450 to 675 and an increase in weight capacity from 4,150 to
5,250 lbs. The Bell 407 or its equivalent is also commonly used
in the private sector for air ambulance missions.
While these new helicopters provide DPSA with two more
powerful aircraft, the three remaining Bell 206 helicopters will
reach the end of their service lives over the next three years.
One standard for replacing helicopters is 10,000 flight hours, or
10 years. However, according to DPSA maintenance staff and
other public safety entities, the type of flight hours should also
be considered when determining aircraft replacement. For ex-ample,
if the flight hours consist primarily of air transport, re-
Finding II
23
OFFICE OF THE AUDITOR GENERAL
placement could safely be extended beyond the 10-year, 10,000
hours standard. On the other hand, if the flight hours consisted
primarily of more demanding missions, such as search-and-rescue
flights, replacement should occur earlier. Based on the
10,000 flight hour standard, as demonstrated in Table 2, DPSA’s
remaining Bell 206 helicopters will be due for replacement
within the next three years if flight hours remain relatively
constant.
Additional resources needed—Because General Fund monies
support the DPSA program, the Department will need to seek
an increase in its General Fund appropriation to cover any
equipment replacement needs. DPSA indicates that it needs
two additional Bell 407 helicopters and one powerful twin-engine
helicopter to increase the safety of its higher-risk rescue
flights, such as external load operations that carry crew and
victims on the outside of the aircraft. Twin engines allow the
aircraft to continue to hover or fly if one of the helicopter’s en-gines
fail. As noted earlier, Maryland State Police replaced its
entire fleet of single-engine helicopters with twin-engine ones.
Table 2
Department of Public Safety—Aviation Section
Summary of Age and Flight Hours for Bell 206 Helicopters
As of December 1, 1999
Year
Manufactured/Year
Purchased
Cumulative
Flight
Hours
Hours Flown
in Fiscal
Year 1999
Year Cumulative Flight
Hours Expected to
Exceed 10,0001
1982/1982 10,403 648 1999
1982/1987 8,777 818 2001
1984/1987 7,952 756 2002
1 Date calculated using cumulative flight hours and assuming the hours flown in fiscal year 1999 are repre-sentative
of the hours flown each year.
Source: Auditor General staff analysis of helicopter flight data from the Aviation Section’s Alpha IV database.
Base location information was provided by Aviation Section Administrative staff, and cumulative flight
hours, and year of manufacture and purchase were provided by Aviation Section mechanics.
Finding II
24
OFFICE OF THE AUDITOR GENERAL
While DPSA needs to conduct more research to determine the
specific twin-engine helicopter it needs, the cost to purchase
any remaining equipment will be significant. For example, cost
estimates for twin-engine helicopters range from $3.8 to $5.9
million. In addition, one Bell 407 single-engine helicopter costs
approximately $1.5 million.1 Because the cost for replacing heli-copters
is so significant, the DPSA should continue to research
the feasibility of using other funding sources to help offset a
portion of these costs. For example, the DPSA has used Racket-eering
Influenced Corrupt Organization (RICO) monies in the
past to help offset the cost of replacing an airplane. The De-partment
is eligible to receive RICO monies when it participates
in investigations of state or federal racketeering crimes that
result in forfeitures. However, relying on these monies as a
primary funding source would be difficult since there are re-strictive
guidelines for their use and the amount of money
available varies from year to year.
Recommendations
1. DPSA should seek an increase in its General Fund appro-priation
to help cover the costs of replacing any of its three
remaining Bell 206 helicopters.
2. DPSA should also continue to research the feasibility of using
other funding sources such as RICO to help offset the costs of
replacing helicopters.
1 This figure represents the cost after the trade-in value of one Bell 206
helicopter (approximately $500,000.)
25
OFFICE OF THE AUDITOR GENERAL
FINDING III DPSA NOT CHARGING
ENOUGH TO SUPPORT AIR
TRANSPORT ACTIVITIES
DPSA does not charge enough to the cover the cost of the air
transport services it provides to other governmental entities.
Although DPSA has authority to seek reimbursement for many
of the air transport sources it provides, the cost-recovery model
DPSA uses does not reflect the actual costs of providing these
services. By charging full cost, DPSA would almost triple the
reimbursement amount it receives, based on fiscal year 1999
records.
DPSA Can Charge for
Many Air Transport Services
DPSA has authority to seek reimbursement for many of the air
transport services it provides. In all, DPSA provides air transport
services to the Governor’s Office, its own internal staff, and 24
other state agencies for which it has intergovernmental service
agreements (ISAs) and has authority to seek reimbursement.1
DPSA Cost-Recovery Model
Does Not Reflect True Costs
DPSA’s cost-recovery model—its method for determining what
to charge for the air transport services it provides—captures only
a small percentage of the costs associated with providing these
services. DPSA’s model includes only three elements: pilot over-
1 DPSA does not charge the Governor for flights as DPS is statutorily
required to provide her with transportation. It also does not charge itself
or other DPS sections for air transport services.
Finding III
26
OFFICE OF THE AUDITOR GENERAL
time pay, maintenance (labor and parts), and fuel. In contrast, the
cost-recovery model used by federal agencies to fully recover
such costs includes many more categories, such as crew costs
(salaries, benefits, training, etc.), insurance, and depreciation. The
rates that would be computed under this federal model are sev-eral
times higher than the rates under DPSA’s model. Based on
air transport services provided during fiscal year 1999, DPSA
could triple its air transport revenue by using these full-cost
rates.
Federal cost-recovery model is more comprehensive than
DPSA’s—The United States Office of Management and Budget
(OMB) has developed a comprehensive cost-recovery model to
help federal agencies capture the full cost of providing aviation
services. Federal agencies are required to justify the need to pur-chase
or use internal aircraft as well as recover operating costs
when providing services to other agencies. Table 3 (see page 27)
lists the various categories contained in the OMB’s full cost-recovery
model and explains the elements included in those
categories.
Photo 3: Cessna 210 sometimes used for air transport flights
DPSA’s cost-recovery model for this Cessna, used for air transport, does not
reflect the true costs of operation.
Finding III
27
OFFICE OF THE AUDITOR GENERAL
Table 3
Department of Public Safety—Aviation Section
The United States Office of Management and Budget’s
Full Cost-Recovery Model
As of May 22, 1992
Cost Category Elements
Crew Salaries, benefits, training, per diem expenses, equipment, charts, uni-forms,
overtime charges, and wages of crew members hired on an hourly
or part-time basis
Maintenance Maintenance labor (salaries, benefits, travel, and training), parts, con-tracted
maintenance assistance, engine overhaul, and aircraft refurbish-ment
Fuel and other fluids Gasoline, oil, and other fluids consumed by the aircraft
Operations overhead All costs associated with direct management and support of the aircraft
program, such as personnel costs for management and administrative
personnel directly responsible for the aircraft program, and rental costs for
hangars and office space
Administrative overhead A pro-rated share of salaries, office supplies, and other expenses of fiscal,
accounting, management, and similar common services performed out-side
of the aircraft program but which support the program
Insurance Self-insurance or private insurance to cover casualty losses and liability
claims
Leases The aircrafts’ associated lease or rental costs
Landing and tie down fees The landing and/or tie down fees associated with aircraft usage
Depreciation The reduction of an aircraft’s value (purchase price less residual value)
over its useful life
Source: Auditor General staff analysis of Office of Management and Budget Circular No. A-126, Accounting
for Aircraft Costs.
Under more comprehensive model, DPSA’s rates and reim-bursements
would be much higher—If DPSA were to compute its
air transport rates using the OMB cost-recovery model, its rates
would be much higher and its air transport revenue would al-most
triple. Figure 2 (see page 28) compares the hourly rates
charged by DPSA for its air transport services to the rates that
would be charged using the OMB’s full cost-recovery model.1 As
1 The full-cost hourly rates for the DPSA’s airplanes do not include ad-ministrative
overhead costs. The OMB model states “agencies should ex-ercise
their own judgment as to the extent to which aircraft users should
bear the administrative overhead costs.” Also, depreciation costs are in-cluded
for only one airplane because, based on their ages, the remaining
three would have been fully depreciated.
Finding III
28
OFFICE OF THE AUDITOR GENERAL
the figure shows, the hourly rates for airplanes under the OMB
model are two to seven times higher than DPSA’s rates. Using
the OMB’s rates, DPSA’s reimbursements would almost triple.
Specifically, DPSA received $37,261 in air transport reimburse-ments
for fiscal year 1999 and it could have received $111,085
using full-cost rates.
Figure 2
Department of Public Safety—Aviation Section
Comparison of Department’s Hourly Aircraft Rates
to Full-Cost Hourly Rates
Year Ended June 30, 1999
$526
$1,719
$464
$918
$173
$733
$82
$623
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
King Air B-200 King Air E-90 Cessna 210 Cessna 182
DPSA Hourly Rate OMB Full-Cost Hourly Rate
1 Full-cost rates were calculated using Aviation Section Expenditure data for fiscal year 1999 and the
Office of Management and Budget’s full cost-recovery model described in Table 3 (see page 27). The
full-cost rates do not include administrative overhead costs. The OMB model states, “agencies should
exercise their own judgment as to the extent to which aircraft users should bear the administrative
overhead costs.” In addition, depreciation costs are included only for the King Air B-200 as the three
other aircraft have been fully depreciated based on their age.
Source: Auditor General staff analysis of financial information provided by the Department of Public Safety.
Finding III
29
OFFICE OF THE AUDITOR GENERAL
Problems with DPSA’s cost model were identified as early as
1992. In that year, the Governor’s State Long-Term Improved
Management (SLIM) project recommended that DPSA charge
sufficiently to cover the operating costs of air transport services
provided to other agencies. In response, DPSA indicated that it
would increase its rates to include direct operating costs, rent,
insurance, and replacement costs as well as the cost of one pilot.
While DPSA increased most of its rates slightly from its 1992
rates, it did not implement the rates it proposed in response to
the SLIM report, and it did not change its model to include the
elements it stated it would. DPSA indicated it did not implement
full-cost rates because it believes many of these costs, such as
insurance, would exist whether or not it provided air transport
services to other agencies. However, since DPSA is not man-dated
to provide air transport services (except for the Governor),
it is not clear that all of these costs would exist or exist at current
levels if it did not provide these services for other agencies.
DPSA Needs to Adopt
Better Model
To ensure that charges are sufficient to cover the expenses of its
air transport activities, DPSA should adopt a more comprehen-sive
cost model that includes all of the elements in OMB’s full
cost-recovery model.
To make these changes, however, DPSA would need to update
its cost information and develop a method for capturing the
necessary costs.
n Cost information needs to be more current—DPSA used
annual costs for maintenance and fuel over a three-year pe-riod
to set its airplane and helicopter rates. However, its cur-rent
rates are obsolete as they are based on expenditures from
fiscal years 1994 through 1996.
n Additional cost categories needed—The budget reports
used to develop the existing rates do not separate all costs by
aircraft or capture the expenditures by the categories in-cluded
in the OMB’s full cost model. Therefore, DPSA will
need to implement an accounting system or software pro-
Finding III
30
OFFICE OF THE AUDITOR GENERAL
gram that captures all the necessary costs by aircraft. These
costs can then be used to update its air charter rates when its
intergovernmental service agreements expire.
The new, higher rates may impact the extent to which other
agencies use DPSA’s air transport services. Specifically, the large
increase in rates may reduce demand, as it will likely cause users
to compare the cost of using DPSA services to a commercial or
charter airline service. While presumably one aircraft is needed
to fulfill DPS’ statutory mandate to transport the Governor, the
remaining aircraft should be self-supporting, because they are
not used to fulfill the agency's mandate. Consequently, if de-mand
is reduced, DPSA should consider disposing of aircraft
that are not self-supporting in an appropriate and legal manner.
Recommendations
1. DPSA should expand its existing cost-recovery model to
include all elements suggested by OMB’s full cost-recovery
model.
2. DPSA should establish an accounting mechanism to capture
all costs included in the OMB model for each of its airplanes.
3. DPSA should review these costs and use this information as
the basis for establishing new rates for its intergovernmental
service agreements with the agencies that utilize its air trans-port
services when the agreements expire.
4. If demand is reduced as a result of increasing rates, DPSA
should dispose of any aircraft that are not used to fulfill its
mandate and that are not self-supporting.
OFFICE OF THE AUDITOR GENERAL
Agency Response
OFFICE OF THE AUDITOR GENERAL
(This Page Intentionally Left Blank)
May 12, 2000
Ms. Debra K. Davenport, CPA
Auditor General
State of Arizona
Office of the Auditor General
2910 N. 44th Street
Phoenix, Arizona 85018
Dear Ms. Davenport:
Enclosed you will find my written comments in response to the revised preliminary report draft of the
performance audit of the Department of Public Safety’s Aviation Section (DPSA).
Please feel free to contact my office at (602) 223-2464 if you have any questions.
Sincerely,
Dennis A. Garrett, Colonel
Director
gk
Enclosures: Response
Disk
RESPONSE TO THE PRELIMINARY REPORT OF THE
OFFICE OF THE AUDITOR GENERAL’S PERFORMANCE AUDIT OF THE
DEPARTMENT OF PUBLIC SAFETY - AVIATION SECTION
FINDING I: DPSA should serve as backup air ambulance provider to the private sector.
Recommendation 1: DPSA should rewrite its mission statement to change its role in air
ambulance services to that of a backup provider unless the private sector
is unavailable or unable to respond in a timely manner.
Response: The finding of the Auditor General is not agreed to and the recommendation will not be
implemented.
Title 41, Chapter 12.1, Article 1, Paragraph 41-1834:
A. For the primary purpose of providing the most timely, efficient and comprehensive emergency medical services
possible, the director may, subject to the availability of funds, purchase, equip, staff and be responsible for
maintaining aircraft, including helicopters, or may lease or contract for such equipment and services. Aircraft and
helicopters shall also be used in law enforcement activities. The aircraft provided by this section may be made
available for emergency services at any time there is a medical emergency requiring the use of evacuation aircraft,
as determined by a law enforcement agency or a physician. Emergency medical air evacuation shall normally take
precedence over routine law enforcement missions. The director shall make the final decision relative to such
aircraft utilization.
B. Each medical evacuation aircraft or helicopter shall be capable of carrying two litter patients and one paramedic
in addition to the ambulance pilot.
C. The director may contract with a private firm, a corporation, or an individual for the maintenance of the aircraft,
including helicopters.
D. The director may enter into contracts with private firms or individuals for emergency surface or air ambulance
services when no other such services are readily available or when deemed to be in the best interests of the state.
E. Medical evacuation aircraft, including helicopters, operated by the department shall not be used to provide
transportation for officials of the state or any of its political subdivisions. This does not preclude the use of
medical evacuation aircraft by such officials when required in the course of a law enforcement function or
emergency or when such official is the victim of an emergency medical situation.
F. Notwithstanding subsection E, the director may enter into interagency service agreements with other state
agencies for the use of helicopters and other aircraft that the department will operate to provide aviation services
on an availability basis when the department deems that these services are in the best interests of this state.
These services may be in addition to the services the department provides pursuant to this chapter but shall not
preclude the delivery of emergency evacuation services provided for under this chapter. The amount of monies
collected from state agencies for aviation services shall not exceed the operational costs of the aircraft.
Comments: The Department of Public Safety’s long-standing interpretation of the above statutory
reference, continually reinforced by the legislature, is that DPS is statutorily mandated to
provide the most timely, efficient and comprehensive emergency medical air evacuation
services possible, and secondly, that emergency medical air evacuation services normally
take priority over law enforcement missions. In this regard, the authority to change this
aspect of DPSA’s mission rests solely with the legislature which must effect changes to
enabling statutes.
2
Recommendation 2: DPS should work to eliminate dispatching practices that favor DPSA.
Specifically, DPS should establish a written policy to be used by EMSCOM
that states that private providers are to be contacted first and that DPSA
is to be contacted only if private providers are unavailable or unable to
provide timely service. Requesting agencies (fire departments, ground
ambulances and sheriff’s offices, etc.) should be provided a copy of this
new policy.
Response: The finding of the Auditor General is agreed to and a different method of dealing with the
finding will be implemented.
Comments: DPSA is unaware of any existing policy or practice which is specifically designed to favor
the dispatch of a DPSA helicopter, rather than a private sector air ambulance, to the scene
of a medical emergency. Existing dispatch practices are intended to ensure the most rapid
emergency medical response available. Dispatching the closest available appropriate
emergency medical helicopter, public or private, is the only reasonable and medically
defensible procedure.
DPSA will work with DPS Operational Communications managers to develop a policy and
procedure designed to ensure the dispatch of the closest available appropriate emergency
medical helicopter, be it public or private, when a request for emergency medical air
evacuation services is received by DPS. In cases where a private sector air ambulance and
a DPSA helicopter have the same estimated time of arrival (ETA) at a scene, policy will
require that the call for service be deferred to the private sector provider.
Recommendation 3: DPSA should seek to ensure that the practice of “launching off the
scanner” does not occur. Specifically, DPSA should establish a written
policy stating that this practice is not appropriate and that staff should not
initiate a flight without first verifying the need for an emergency
helicopter. All air units should be provided a copy of this policy.
Response: The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Comments: DPSA will develop a written standard operating procedure establishing appropriate
criterion for responding to medical emergencies.
Recommendation 4: After implementing the other recommendations, DPSA should assess
whether its services are used enough to warrant the present level of
resources, and if not, how to reduce unwarranted expenditures.
3
Response: The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Comments: DPSA is engaged in a continuous effort to maximize the use of available resources and
reduce unwarranted expenditures.
FINDING II: DPSA needs more powerful helicopters to conduct some missions.
Recommendation 1: DPSA should seek an increase in its General Fund appropriation to help
cover the costs of replacing any of its three remaining Bell 206 helicopters.
Response: The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Comments: DPS is currently working with the State Legislature to replace DPSA’s three remaining Bell
206L helicopters. Optimally, DPSA would like to complete its fleet replacement program
by July 2002, in accordance with the Auditor’s recommendation.
It should be noted that, while the limited performance capabilities of DPSA’s remaining Bell
206L helicopters adversely effect DPSA’s ability to perform some missions efficiently and
effectively, DPSA Air Rescue crews will not engage in missions that are inherently unsafe.
Recommendation 2: DPSA should also continue to research the feasibility of using other
funding sources such as RICO to help offset the costs of replacing
helicopters.
Response: The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Comments: DPSA will continue to seek out every available appropriate funding source to supplement
the cost of helicopters.
FINDING III: DPSA is not charging enough to support air transport activities.
Recommendation 1: DPSA should expand its existing cost-recovery model to include all
elements suggested by OMB’s full cost-recovery model.
4
Response: The finding of the Auditor General is agreed to and a different method of dealing with the
finding will be implemented.
Comments: DPSA will reevaluate its existing cost-recovery model for air transport services and will
expand it as necessary to include all appropriate elements suggested by the OMB’s full
cost-recovery model.
Recommendation 2: DPSA should establish an accounting mechanism to capture all costs
included in the OMB model for each of its airplanes.
Response: The finding of the Auditor General is agreed to and a different method of dealing with the
finding will be implemented.
Comments: DPSA is in the process of making improvements in automated data collection; replacing
its current data collection system with Microsoft Access. Anticipated delivery date is in late
June 2000. The new system will be designed to capture all appropriate costs included in
the OMB model for each of its airplanes.
Recommendation 3: DPSA should review these costs annually and use this information as the
basis for establishing new rates for its intergovernmental service
agreements with the agencies that utilize its air transport services when
they expire.
Response: The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Recommendation 4: If demand is reduced as a result of increasing rates, DPSA should dispose
of any aircraft that are not used to fulfill its mandate and that are not self-supporting.
Response: The finding of the Auditor General is agreed to and the recommendation will be
implemented.
Comments: All DPSA aircraft are currently used to fulfill the DPS mandate. If aircraft become excess
to the Agency’s needs in the future, DPSA will dispose of them.
Other Performance Audit Reports Issued Within
the Last 12 Months
99-7 Arizona Drug and Gang Policy
Council
99-8 Department of Water Resources
99-9 Department of Health Services—
Arizona State Hospital
99-10 Residential Utility Consumer
Office/Residential Utility
Consumer Board
99-11 Department of Economic Security—
Child Support Enforcement
99-12 Department of Health Services—
Division of Behavioral Health
Services
99-13 Board of Psychologist Examiners
99-14 Arizona Council for the Hearing
Impaired
99-15 Arizona Board of Dental Examiners
99-16 Department of Building and
Fire Safety
99-17 Department of Health Services’
Tobacco Education and Prevention
Program
99-18 Department of Health Services—
Bureau of Epidemiology and
Disease Control Services
99-19 Department of Health Services—
Sunset Factors
99-20 Arizona State Board of Accountancy
99-21 Department of Environmental
Quality—Aquifer Protection Permit
Program, Water Quality Assurance
Revolving Fund Program, and
Underground Storage Tank Program
99-22 Arizona Department of Transportation
A+B Bidding
00-1 Healthy Families Program
00-2 Behavioral Health Services—
Interagency Coordination of Services
00-3 Arizona’s Family Literacy Program
00-4 Family Builders Pilot Program
00-5 Department of Agriculture—
Licensing Functions
00-6 Board of Medical Student Loans
Future Performance Audit Reports
Department of Agriculture’s
Animal Disease, Ownership and Welfare Protection Program
Department of Agriculture’s
Food Safety and Quality Assurance Program