Performance audit, Department of Environmental Quality, Water Quality Division

              A REPORT
TO THE
ARIZONA LEGISLATURE
Debra K. Davenport
Auditor General
Department of
Environmental Quality–
Water Quality Division
Performance Audit Division
August • 2004
REPORT NO. 04 – 05
Performance Audit
The Auditor General 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 servic-es
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
Representative John Huppenthal, Chair Senator Robert Blendu, Vice Chair
Representative Tom Boone Senator Gabrielle Giffords
Representative Ken Clark Senator Peter Rios
Representative Ted Downing Senator Thayer Verschoor
Representative Steve Yarbrough Senator Jim Weiers
Representative Jake Flake (ex-officio) Senator Ken Bennett (ex-officio)
Audit Staff
Lisa Eddy, Manager and Contact Person
Sandra Tulloss, Team leader
Jason Taylor
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 44 th 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
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
August 18, 2004
Members of the Arizona Legislature
The Honorable Janet Napolitano, Governor
Mr. Stephen A. Owens, Director
Arizona Department of Environmental Quality
Transmitted herewith is a report of the Auditor General, A Performance Audit and Sunset
Review of the Department of Environmental Quality—Water Quality Division. This report is
in response to a November 20, 2002, resolution 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 Department of Environmental Quality agrees with all of the
findings and plans to implement 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 19, 2004.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
Mission:
“The mission of the Water Quality Division is to protect and
enhance public health and the environment by ensuring safe
drinking water and reducing the impact of pollutants
discharged to surface and groundwater.”
Services:
The mission of the Division is to protect and enhance public
health and the environment by ensuring safe drinking water
and reducing any impacts of pollutants to surface and
groundwater. The Division strives to protect the public and
water quality by developing water quality management
plans, establishing water quality standards, anticipating
problems through ongoing water quality monitoring and
assessment, and responding to emergencies. Additionally, it
regulates discharges from a variety of sources, including
wastewater treatment plants, landfills, mining operations,
industrial facilities, irrigated agriculture, and urban runoff.
Finally, the Division promotes voluntary programs to protect
the aquifers for drinking water use.
Facilities:
The Division’s staff is primarily located on the 5th floor at 1110
West Washington in Phoenix; the building is a private lease-to-
own facility at an annual cost of approximately $3.6 million
for the entire Department. In addition to the Central Phoenix
Office, the Division has some staff working on issues who
report to assistant directors located in the Northern Regional
Office (NRO) located in Flagstaff and the Southern Regional
Office (SRO) located in Tucson. The NRO is located in a
privately owned facility where the Department rents space on
an annual lease of $80,600 for 4,600 square feet. The SRO
is located in a state-owned building at 400 West Congress
that the Department rents from the Department of
Administration on an annual lease of $116,000 for 5,700
square feet. The Department does not break down these
building costs by division.
PROGRAM FACT SHEET
Arizona Department of Environmental Quality
Water Quality Division
Permits Section
60 FTE
Hydrologic Support
and Assessment Section
43 FTE
Compliance
Section
33 FTE
Drinking Water
Section
29 FTE
Director's Office
16 FTE
Planning
Section
7 FTE
Program revenue:
$14.7 million (fiscal year 2003, actual)
Program staffing:
188 (as of January 2004) includes 20 vacancies
Office of the Auditor General
Government
Grants and
Contracts
$6,932,042
State General Fund
Appropriations
$4,184,421
Miscellanenous
$28,431
Water Quality Assurance
Revolving Fund $1,476,426
Licenses, Permits,
and Fees
$2,096,976
Special equipment:
The Division uses standard office equipment, such as furniture, desktop computers, and laptop
computers. The Division also has 15 vehicles (5 SUVs, 5 pick-up trucks, 4 vans, and 1 sedan)
that it uses mostly for compliance/enforcement inspections and monitoring and field
investigations. In addition, the Division has specialized equipment, such as global positioning
system (GPS) units for determining the latitude and longitude of a particular location, flowmeters
to measure the water flow of streams, turbidmeters to measure water clarity, and a pontoon boat
with motor for collecting water samples from large reservoirs.
Core goals:
􀁺􇩔 To provide value to Arizona’s citizens, meet customer needs, and promote Arizona’s
interests.
􀁺􇩔 To provide clean and safe water.
􀁺􇩔 To provide clean and safe drinking water by increasing the percentage of water
attaining designated uses.
􀁺􇩔 To protect clean and safe water by protecting groundwater and surface water.
􀁺􇩔 To ensure that nonpoint sources of pollution are reduced to meet water quality
standards in 30 percent of the State’s watersheds.
Adequacy of performance measures:
Although the Division’s performance measures appear to be generally aligned with its mission,
auditors identified opportunities to improve the Division’s performance measures.
First, the Division should consider adding output measures that quantify such things as the
following:
􀁺􇩎 Number of Notice of Violation (NOVs) issued;
􀁺􇩎 Number of new Community Water Systems (CWS) certified;
􀁺􇩐 Percentage of CWS out of compliance; and
􀁺􇩐 Percentage of CWS in compliance.
Additionally, the Division should consider adding outcome measures that quantify the following:
􀁺􇩐 Percentage of Notices of Opportunity to Correct (NOC) resolved within the statutorily
allotted time; and
􀁺􇩐 Percentage of NOVs resolved within the statutorily allotted time.
State of Arizona
Source: Auditor General staff compilation of unaudited information obtained from the Department’s Web site, Arizona Financial Information System (AFIS)
Accounting Event Transaction File for the years ended June 30, 2002 and 2003, the Office of Strategic Planning and Budgeting’s Arizona Master
List of State Government Programs 2002-2005, and other information provided by the Department.
The Office of the Auditor General has conducted a performance audit of the
Department of Environmental Quality, Water Quality Division pursuant to a November
20, 2002, resolution 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 and is the first in a series of four reports on the
Department of Environmental Quality. The subsequent reports will focus on the
Waste Programs Division, the Air Quality Division, and an analysis of the 12 statutory
Sunset factors.
The Water Quality Division has primary responsibility for enforcing federal and state
water quality standards in Arizona, thus helping to ensure that Arizona’s citizens have
access to safe drinking water. Drinking water can be potentially contaminated by a
variety of dangerous substances, such as high levels of fecal coliform or nitrates.
High levels of some contaminants can cause short-term health risks and even death
to those at special risk. As a result, the federal and state governments have
established water quality standards enforced by the Division, which are designed to
identify those systems that are potentially providing dangerous drinking water.
Division could improve its oversight of drinking water
quality monitoring (see pages 7 through 12)
The Division serves as the primary agency for enforcing state and federal water
quality regulations under agreement with the federal Environmental Protection
Agency (EPA) to ensure that Arizona’s citizens have access to safe drinking water.
Contaminants such as fecal coliform or nitrates can cause short-term health risks
and even death to those at special risk. As of October 2003, there were
approximately 1,650 regulated drinking water systems throughout the State, which
vary in size between 25 and more than 1.2 million connections.
All public drinking water systems are required to monitor their water and report
specified contaminant levels at specific intervals, often monthly, to the Division. The
Office of the Auditor General
SUMMARY
page i
Division then electronically submits the monitoring reports to the EPA, which analyzes
these results and identifies which systems are considered to be significantly
noncompliant (SNC).
Between the time a system commits a violation and the EPA identifies the system on
the SNC list, the Division may make informal efforts to help bring the system into
compliance. However, the Division typically waits for the SNC list to develop its
Drinking Water Priority Log, which lists all the facilities that the Division would like to
further investigate. As of March 2004, there were 111 facilities on the log. However,
the Division reports that it does not have enough staff to assign enforcement staff to
every facility on the log at any one point in time. Therefore, it must prioritize which
facilities to assign to enforcement staff. In agreement with the EPA, the Division
currently focuses on violations that allege unallowed levels of nitrates or the failure to
test for nitrates. As of March 2004, 44 of the 68 facilities with nitrate violations on the
Priority Log were assigned to enforcement staff.
As the Division does not immediately assign enforcement staff to every new Drinking
Water Priority Log entry, violations can continue for a considerable amount of time.
For example, the facilities listed on the March 2004 Drinking Water Priority Log that
were not yet assigned enforcement staff had been considered significantly
noncompliant by the EPA typically for 3 years, with one system considered
significantly noncompliant for almost 8 years. During this time, nearly 100,000 homes
and businesses served by these facilities were potentially exposed to unhealthy
drinking water. Unassigned facilities with nitrate violations had been typically
considered significantly noncompliant for about 2-1/2 years, with one system
considered noncompliant for almost 4 years. These facilities served nearly 60,000
homes and businesses.
The Division could increase the impact of its limited resources by expanding the
Monitoring Assistance Program (MAP). All public drinking water systems that serve
fewer than 10,000 connections are required to join the fee-based MAP, which hires
private contractors to conduct and report some required water quality test results
directly to the Division. While MAP currently provides many of the required water
quality tests for these systems, it does not provide testing for contaminants such as
lead, copper, and nitrates. The majority of the facilities on the Drinking Water Priority
Log are small water systems that often do not obtain these tests on their own, and
therefore incur monitoring and reporting violations. Expanding MAP to conduct all the
required tests would eliminate these violations. In turn, the Division’s limited staff
resources could be concentrated on a smaller number of violations. Additionally, after
the Division has decided whether to expand MAP and has implemented any
changes, it should re-evaluate enforcement staff levels.
State of Arizona
page ii
Division should charge fees for drinking water plan
reviews (see pages 13 through 16)
The Division should charge fees for performing drinking water plan reviews, as
Arizona statute requires. These reviews cover the planning and construction of wells,
water treatment plants, and a variety of other facilities. In response to industry
opposition in 1996, the Division does not charge fees as required. Instead, the
Division primarily uses a combination of General Fund and federal grant monies to
cover the cost of conducting the reviews. In fiscal year 2003, these costs came to
$676,200, according to the Division.
Despite industry concerns about these fees, all counties with delegated authority to
perform drinking water plan reviews already charge fees and have done so for many
years. Additionally, although some industry representatives still have some concerns
about these fees, other representatives appear to recognize the Division’s general
need to charge fees to recover costs.
To comply with statute, reduce the review function’s reliance on the General Fund,
and potentially free federal grant monies for other purposes, the Division should
adopt administrative rules to implement the statutorily required fees. To establish
these fees, the Division will need to begin tracking the hours it spends reviewing
applications. However, it could adopt forms and processes already used by other
plan review functions within the Department to track their hours.
Division has made significant progress in processing
APP applications (see pages 17 through 21)
Although the Division has had difficulties processing Aquifer Protection Permit
applications in the past, it has made significant progress in meeting a statutory APP
permit-processing deadline. One of the Division’s key responsibilities is to limit
discharges to the State’s aquifers by issuing APP permits. The aquifer is a layer of
permeable rock, sand, or gravel through which groundwater flows, containing
enough water to supply wells and springs. Arizona is significantly dependent on
aquifers for its water supplies.
The APP program allows facilities to operate under two types of APPs, general and
individual, both intended to protect Arizona’s aquifers. Specifically, general permits
can only be considered for certain types of discharges to the aquifer, such as septic
Office of the Auditor General
page iii
tanks and vehicle- and equipment-washing facilities. In contrast, individual permits
are more flexible. The Division issues four types of individual permits: industrial,
mining, wastewater, and drywell.
Auditors’ review of division data indicated that, as of December 2003, the Division
has processed all but one of the nonmining APP applications by developing and
implementing a strategy known as OPERA (Operation Permit Arizona). OPERA was
a department-wide effort that involved assigning staff from a variety of units to help
process pending APP applications. As of December 2003, division data indicated
that the Division had issued a total of 524 individual APP permits, referred 23 facilities
to its compliance unit for a variety of reasons, such as failing to submit a required
APP application, and had one APP application pending for nonmining facilities.
Similarly, division data indicated that 61 nonmining applications have been denied or
withdrawn.
The Division is further refining this approach to address the remaining mining APP
applications as the statutory 2006 deadline approaches. Division data indicated that,
as of December 2003, the Division was in the process of handling 13 mining facilities’
applications and had referred 11 facilities to its compliance unit. Additionally, the
division data indicated that another 10 facilities had not yet submitted but were
expected to submit APP applications. Before the 2006 deadline, the Division will need
to take some sort of action regarding these facilities. For example, if the Division
receives applications for these facilities, it will need to process them. Conversely,
those facilities that fail to submit required APP applications will need to be referred to
the Division’s compliance unit for appropriate enforcement action.
Division could more accurately recover APP costs (see
pages 23 through 26)
The Division should change how it calculates and applies the fees it charges for
processing APP applications. Statute requires the Division to charge fees to recover
the direct costs of processing applications; General Fund monies are used for the
remaining costs. In fiscal year 2003, the Division generated approximately $1.2
million from these fees.
To help ensure the accurate recovery of costs, the Division should make sure its APP
processing fees are appropriately calculated and applied. First, the Division should
set the fees based on the actual direct costs to perform the reviews. Now the Division
is setting the fees to recover only those costs not covered by General Fund monies.
Second, the Division should recalculate the fees regularly. The Division has not
State of Arizona
page iv
recalculated the fees since 2001 even though billable hours and costs have changed
over time. Third, the Division should charge for time traveling to permit sites. Due to
negotiations with the regulated community, the Division does not charge fees for
travel time to permit sites, even though it falls under the standard definition of direct
costs.
Finally, after these changes have been made so that the Division is accurately
recouping its direct costs through appropriate fee levels, it should also ensure its
future General Fund appropriation requests to the Legislature reflect true indirect
costs for issuing APP permits.
Office of the Auditor General
page v
State of Arizona
page vi
Office of the Auditor General
TABLE OF CONTENTS
continued
page vii
1
7
7
8
10
11
12
13
13
14
16
16
17
17
18
19
21
Introduction & Background
Finding 1: Division could improve its oversight of
drinking water quality monitoring
Safe drinking water is an important division responsibility
Division oversight impacted by staff resources
Expanded small systems compliance assistance could help
Division should review enforcement staff levels in future
Recommendations
Finding 2: Division should charge fees for drinking
water plan reviews
Division performs drinking water plan reviews
Division does not charge fees
Division should use proven methods to develop fees
Recommendations
Finding 3: Division has made significant progress in
processing APP applications
APP permits intended to protect groundwater
Division offers different types of APPs
Division has made progress in processing nonmining APP
permits, but a significant number of mining APP permits remain to
be issued
Recommendation
State of Arizona
TABLE OF CONTENTS
concluded
page viii
Finding 4: Division could more accurately recover APP
costs
APP program charges user fees
Division could better ensure accurate cost recovery
Fees should be recalculated before maximum fees are analyzed
Recommendations
Agency Response
Tables:
1 Water Quality Programs Division
Schedules of Revenues and Expenditures
Years Ended June 30, 2002 and 2003 (unaudited)
2 Drinking Water Plan Review Fees
Charged by Counties
As of February 2004
Figure:
1 Components of an Aquifer
23
23
24
25
26
4
15
18
The Office of the Auditor General has conducted a performance audit of the
Department of Environmental Quality, Water Quality Division pursuant to a November
20, 2002, resolution 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 and is the first in a series of four reports on the
Department of Environmental Quality. The subsequent reports will focus on the
Waste Programs Division, Air Quality Division, and an analysis of the 12 statutory
Sunset factors.
Water Quality Division monitors and protects water quality
The Water Quality Division has primary responsibility for enforcing water quality
standards in Arizona. The Division’s mission is “to protect
and enhance public health and the environment by
ensuring safe drinking water and reducing the impact of
pollutants discharged to surface and ground water.”
Specifically, it is responsible for assessing the quality of
the State’s waters, supporting the cleanup of water
contamination when it occurs, regulating and taking
enforcement action when drinking and waste-water
systems regulations are violated, and providing technical
assistance and public education about water quality
issues.
These responsibilities are important because Arizona’s
citizens need access to safe drinking water. Drinking water
can potentially be contaminated in a number of ways,
such as high levels of fecal coliform or nitrates. While a low
level of contamination is generally allowed, high levels of
some contaminants can cause short-term health risks and
even death to those at special risk.
Through the United States Safe Drinking Water and Clean
Water Acts, the federal government has set many of the
Office of the Auditor General
INTRODUCTION
& BACKGROUND
page 1
Examples of Potential Drinking
Water Contaminants
Fecal Coliform—The major source of fecal
coliform in drinking water is human and animal
fecal waste. Microorganisms in these wastes can
cause short-term effects, such as diarrhea,
cramps, nausea, and headaches, and they may
pose a special health risk for infants, young
children, and people with severely compromised
immune systems. The presence of these bacteria
can indicate that other harmful organisms are also
present in the water.
Nitrates—The primary sources of nitrates in
drinking water are human and animal waste, and
fertilizer. Infants younger than 6 months who drink
water containing excess nitrates could become
seriously ill and, if untreated, may die.
water quality standards enforced by the Division. For example, the United States
Environmental Protection Agency (EPA) sets specific allowable levels for individual
compounds, such as fecal coliform and nitrates. States cannot substitute less-stringent
standards, but may impose standards that exceed federal law. Arizona has
also established its own regulatory program to protect groundwater for drinking water
purposes. Specifically, the Aquifer Protection Permit (APP) program requires
individuals and businesses to operate under permits that reduce or eliminate the
migration of pollutants into Arizona’s aquifer (see Finding 3, pages 17 to 21).
Organization, staffing, and budget
As of January 2004, the Division was divided into six sections with a total of 188 FTEs,
each providing a variety of services intended to maximize Arizona’s water quality.
􀁺􇩐 Permits (60 FTEs), 5 vacancies—This section issues permits that regulate
discharges from domestic wastewater treatment plants, mining operations,
drywells, industrial facilities, and certain sewage and reclaimed water systems.
The Department has delegated some responsibility regarding certain sewage
permits and onsite wastewater treatment systems to some local governments.
􀁺􇩈 Hydrologic Support and Assessment (43 FTEs), 7 vacancies—This section
analyzes water pollution problems across the State and helps establish water
quality standards. In addition, the section provides the Division with scientific
and technical support for investigating groundwater and surface water pollution
from spills, illegal discharges, and unregulated sources.
􀁺􇩃 Compliance (33 FTEs), 2 vacancies—This section enforces federal and state
water quality laws and regulations and inspects drinking water and wastewater
facilities. For example, federal and state rules require public drinking water
systems to be inspected at least every 10 years. When the Department detects
a water quality violation, it can take a variety of enforcement actions, including
issuing Notices of Violation and filing Civil Complaints.
􀁺􇨠 Drinking Water (29 FTEs), 3 vacancies—This section aims to protect public
health by protecting drinking water sources. For example, it runs the Monitoring
Assistance Program, which assists small water systems with water quality
monitoring, and it conducts outreach activities, such as conducting workshops
and publishing information about drinking water. Section employees also review
swimming pool and public drinking water plans, and certify drinking water
system operators. This section conducts these reviews throughout Arizona
except where the State has delegated the responsibility to a local jurisdiction.
This section also implements the Source Water Protection Program, which is
State of Arizona
page 2
designed to protect drinking water sources from becoming contaminated in the
future, and provides assistance on water system security issues.
􀁺􇩐 Planning (7 FTEs), 0 vacancies—This section assists the Division’s other
sections by conducting short- and long-range budget and strategic planning,
applying for and managing federal grants to support division activities,
coordinating state and federal fiscal budget oversight activities, and helping
other outside governmental agencies and other organizations to support a
coordinated, state-wide planning process.
􀁺􇨠 Director’s Office (16 FTEs), 3 vacancies—The Director’s Office provides
leadership, management, and support for the Division. In addition, the Director’s
Office supports the Division’s data systems, including the drinking water,
groundwater, dry well, water permits and certifications, plan reviews, and
wastewater databases.
As illustrated in Table 1 (see page 4), the Division receives funding from a variety of
sources. For fiscal year 2003, the Division received approximately $4.2 million from
the General Fund. Additionally, it received a total of approximately $10.5 million from
a combination of other sources, including user fees and federal funds.
Office of the Auditor General
page 3
Key Hydrology Terms
Aquifer— layer of permeable rock, sand, or gravel through which groundwater flows,
containing enough water to supply wells and springs (see also Figure 1, page 18 for a
diagram of an aquifer).
Drywell—A bored, drilled, or driven shaft or hole constructed specifically for storm-water
disposal.
Groundwater—Water that flows or seeps downward and saturates soil or rock, supplying
springs and wells. The term also refers to water stored underground.
Reclaimed Wastewater—Treated wastewater that can be used for beneficial purposes,
such as irrigating plants.
Surface Water—Water that is on the Earth’s surface, such as in a stream, river, lake, or
reservoir.
Watershed—The land area that drains water to a particular stream, river, or lake.
Wastewater—Water that has been used in homes, industries, and businesses that
should not be reused unless it is treated.
State of Arizona
page 4
Table 1: Water Quality Programs Division
Schedule of Revenues and Expenditures
Years Ended June 30, 2002 and 20031
(Unaudited)
2002 2003
(Actual) (Actual)
Revenues:
State General Fund appropriations $ 4,196,487 $ 4,184,421
Government grants and contracts 6,270,467 6,932,042
Licenses, permits, and fees 1,868,942 2,096,976
Water Quality Assurance Revolving Fund 2 1,129,033 1,476,426
Miscellaneous 70,127 28,431
Total revenues 13,535,056 14,718,296
Expenditures:
Personal services and related benefits 8,327,780 8,543,498
Professional and outside services 3,307,265 3,468,575
Travel 281,855 218,363
Other operating 275,478 301,111
Equipment 120,156 79,370
Allocated costs3 1,971,640 2,346,769
Total expenditures 14,284,174 14,957,686
Excess of revenues over (under) expenditures4 $ (749,118) $ (239,390)
1 This schedule presents revenues and expenditures of the Division’s operations. However, 2004
estimates are not readily available because the Department’s budgets are based on its
appropriated budget units and are not consistent with the format of this schedule. In addition,
the Northern and Southern Offices’ water-related expenditures are not included in this table
because the Department does not allocate expenditures among their divisions. The Offices
conduct water, waste, and air activities and have expenditures of approximately $4.1 million.
2 Primarily consists of the Division’s portion of corporate income taxes, water use taxes, fines and
forfeits, and fees deposited in the Water Quality Assurance Revolving Fund (WQARF), as well
as WQARF’s available fund balance, which are used to pay for water quality monitoring in
accordance with A.R.S. §49-225.
3 Amount is the portion of Department-wide overhead expenditures allocated to the Division, such
as administrative personnel, rent, general accounting, telecommunications system, and risk
management costs.
4 The excess of revenues under expenditures was paid by the Division’s available fund balance.
Source: Auditor General staff analysis of the Arizona Financial Information System (AFIS)
Accounting Event Transaction File for the years ended June 30, 2002 and 2003.
Audit scope and methodology
This audit focused on the Division’s efforts to enforce drinking water standards,
whether the Division should charge fees for drinking water plan reviews, the progress
the Division has made in completing backlogged Aquifer Protection Permit (APP)
applications, and how the Division should change how it calculates its APP fees. This
report presents findings and recommendations in the following areas:
􀁺􇨠 The Division could improve its oversight of drinking water quality monitoring;
􀁺􇨠 The Division should charge fees for drinking water engineering reviews;
􀁺􇨠 The Division has made significant progress in processing APP applications; and
􀁺􇨠 The Division could more accurately recover APP costs.
Several methods were used to study the issues addressed in this audit. Specifically,
auditors reviewed Arizona Revised Statutes and the Arizona Administrative Code.
Auditors also interviewed division and legislative staff, as well as representatives of
individual companies, associations of businesses that the Division regulates, the
Arizona Attorney General’s Office, Maricopa County, and the EPA. Additionally:
􀁺􇩔 To evaluate drinking water enforcement, auditors obtained, validated, and
analyzed database listings of all administrative actions taken by the Division and
Maricopa County regarding drinking water quality between October 1998 and
2003, and the most recent listing of drinking water systems deemed to be
significantly out of compliance by the EPA for the period between April 1, 1996,
and March 31, 2003.
􀁺􇨠 To determine whether the Division should establish drinking water plan review
fees, auditors reviewed statutory requirements, obtained information regarding
the review fees charged by other department and county government
engineering review functions, and interviewed three key industry
representatives.1
􀁺􇩔 To determine the status of the Aquifer Protection Permit program, auditors
obtained, validated, and analyzed a listing of all industrial and mining APP
applications received and permits issued by the Division from December 1,
1989, through December 2, 2003, and reviewed the Division’s plans for
addressing backlogged mining APP applications.
1 Auditors obtained information about review fees charged by a) the Water Quality Division’s wastewater plan review
function, b) the Waste Programs Division, Solid Waste Section’s solid waste plan review function, and c) Maricopa, Pima,
Yavapai, and Yuma Counties’ drinking water plan review functions.
Office of the Auditor General
page 5
􀁺􇩔 To assess the appropriateness of APP application fees, auditors reviewed the
methods that the Division used to develop its most recent fee calculation, as well
as accounting literature about the definitions of direct and indirect costs.1
This audit was conducted in accordance with government auditing standards.
The Auditor General and staff express appreciation to the director, management, and
staff of the Water Quality Division for their cooperation and assistance throughout the
audit.
1 Auditors specifically reviewed OMB Circular A-87, Attachment A, Sections D, E and F.
State of Arizona
page 6
Division could improve its oversight of drinking
water quality monitoring
The Division’s oversight of drinking water quality monitoring could be improved. The
Division is responsible for enforcing state and federal water quality regulations to
ensure that Arizona’s citizens have access to safe drinking water. However, the
Division does not assign staff to investigate and initiate enforcement actions against
all facilities that violate water quality monitoring requirements in a timely manner. The
Division could increase the impact of its limited resources by better assisting small
systems to reduce the number of monitoring violations they commit, thus reducing
its enforcement staff’s workload. Specifically, the Division could expand the
Monitoring Assistance Program (MAP), which helps small systems conduct some
monitoring tests. After the Division decides whether to expand MAP and implements
any changes, it will need to review its enforcement staff levels.
Safe drinking water is an important division
responsibility
The Division serves as the primary agency for enforcing state and
federal water quality regulations under agreement with the EPA to
ensure that Arizona’s citizens have access to safe drinking water.
Contaminants such as fecal coliform or nitrates can cause short-term
health risks and even death to those at special risk.
As of October 2003, there were approximately 1,650 regulated drinking water
systems throughout the State, which vary in size between 25 and more than 1.2
million connections. New systems are built largely because of expanding
development. For example, in 2003, approximately 33 new water systems came
under the Division’s regulation.
Office of the Auditor General
FINDING 1
page 7
A Drinking Water System provides
water, intended for human
consumption, through a set of pipes
or other structures and has at least 15
service connections or regularly
serves an average of 25 people a day
at least 60 days a year.
Source: Auditor General staff summary of A.R.S. §49-
352.
As of October 2003,
there were
approximately 1,650
regulated drinking
water systems in
Arizona.
Division oversight impacted by staff resources
The Division’s efforts to oversee water quality monitoring are impacted by its staff
resources. Specifically, the Division only assigns enforcement staff to investigate and
take enforcement action against some of the high-priority, water quality monitoring
violations that exist at any given time because it reports that it lacks enforcement staff
resources. As a result, some violations go unaddressed for an extended period of
time, potentially exposing Arizona’s citizens to dangerous drinking water.
Division and EPA monitor water quality—All public drinking water systems
are required to monitor their water and report specified contaminant levels at specific
intervals, often monthly, to the Division. Failing to conduct and/or submit these test
results is a violation of state water quality rules. Similarly, systems whose test results
show higher-than-allowed levels of regulated contaminants, also called an
exceedence, may be required to submit additional test results and take action to
lessen the contamination. The Division then electronically submits the monitoring
reports to the EPA, which analyzes these results and identifies which systems are
considered to be significantly noncompliant (SNC).
A considerable amount of time can elapse between when a violation first occurs and
when the EPA lists the violations on the SNC list. According to the EPA, a system may
already have been out of compliance for 6 or more months for bacteriological
contaminants, or as much as 6 years for certain chemical contaminants, due to
monitoring frequencies and data reporting lags. Between the time a system commits
a violation and the EPA identifies the system on the SNC list, the Division may make
informal efforts to help bring the system into compliance. For example, the Division
may send letters or make phone calls reminding the system of monitoring
requirements and/or attempt to rectify problems contributing to the violations.
The EPA provides the SNC list to the Division on a quarterly basis. The Division
reviews the SNC list and identifies those facilities on the list that are continuing to
violate water quality monitoring or contaminant level standards and have not
corrected the violations on their own. The Division then uses this information to
develop its own list, known as the Drinking Water Priority Log, from which the Division
assigns enforcement staff to specific facilities. Once assigned, enforcement staff
investigate each facility’s violations further and start the process of issuing
enforcement actions to bring the facilities back into compliance.
Enforcement staff assigned to investigate some water quality
monitoring violations—The Division does not assign enforcement staff to every
facility that is included in the Drinking Water Priority Log at any one point in time and
some facilities continue to violate for years without being assigned to an enforcement
staff member. For example, by March 2004, 53 of the 111 facilities (47 percent) on
the Drinking Water Priority Log were assigned to enforcement staff.1 The Division
State of Arizona
page 8
1 There were 132 facilities on the March 2004 Priority Log. However, the Division has delegated enforcement responsibility
to Maricopa County for 21 of these facilities. Therefore, auditors focused their analyses on the 111 remaining facilities for
which the Division has primary enforcement responsibility.
reports that it does not assign enforcement staff to every facility because of a lack of
staff resources. Specifically, the Division’s enforcement staff was reduced from five
to three officers between July 2000 and November 2003.
Because staff cannot address every violation occurring at any one time, the Division
determines how it will prioritize which facilities will be assigned to enforcement staff.
With the agreement of the EPA, the Division is currently focusing its staff resources
on violations involving nitrates, including facilities that exceed allowable levels of
nitrates and facilities that fail to test for nitrates. According to the EPA, the primary
sources of nitrate contaminants in drinking water are human and animal waste, as
well as fertilizer. As a result, both the EPA and the Division currently consider these
types of violations a high priority. Of the 111 facilities on the March 2004 Drinking
Water Priority Log, 68 involved facilities with nitrate violations. Enforcement staff were
assigned to 44, or 65 percent, of these facilities. Enforcement staff were also
assigned to 9 facilities not currently involving nitrate violations for a variety of reasons
including staff training needs and prior assignment, in which enforcement action was
already in progress.
As the Division does not immediately assign enforcement staff to every new Drinking
Water Priority Log entry, violations can continue for a considerable amount of time.
For example, the facilities listed on the March 2004 Drinking Water Priority Log that
were not yet assigned enforcement staff had been considered significantly
noncompliant by the EPA typically for 3 years, with one system considered
significantly noncompliant for almost 8 years. During this time, nearly 100,000 homes
and businesses served by these facilities were potentially exposed to unhealthy
drinking water. Unassigned facilities with nitrate violations had been typically
considered significantly noncompliant for about 2-1/2 years, with 1 system
considered noncompliant for almost 4 years. These facilities served nearly 60,000
homes and businesses.
Division piloting new tools to improve enforcement—In response to
resource constraints, the Division has recently piloted new techniques to encourage
facilities with violations to correct their problems with minimal enforcement staff
involvement. For example, rather than using enforcement staff to address only
individual violators, enforcement staff sent a mass mailing of certified letters to all
facilities on the Drinking Water Priority Log with nitrate violations. The letters reminded
the facilities of their responsibilities regarding nitrate testing and allowable
contaminant levels, and requested that they return to compliance. The Division
reports that some facilities corrected their violations after receiving this letter, although
the specific success rate is not known. Complying facilities were removed from the
Drinking Water Priority Log and did not need to be assigned to enforcement staff.
In addition, the Division reports that it has begun to use automatically generated
letters to notify facilities of any failure to meet monitoring and reporting requirements,
which require a response within 10 days. If the facility fails to respond in a timely
Office of the Auditor General
page 9
The Division is focusing
its staff on nitrate
violations.
manner, the Division reports that it issues a series of escalating violations and orders,
potentially including the imposition of fines. As a result of these changes, the Division
reports that the number of significantly noncompliant systems dropped by about 40
percent.
Expanded small systems compliance assistance could
help
In addition to sending out compliance letters, the Division could increase the impact
of its limited resources by expanding the Monitoring Assistance Program (MAP), a
water testing assistance program for small systems. The majority of drinking water
systems on the Drinking Water Priority Log are relatively small drinking water systems
that are required to join MAP. By expanding the number of tests conducted under
MAP, more small drinking water systems would likely be in compliance with water
quality monitoring requirements and the Division’s enforcement staff’s efforts could
be concentrated on a smaller number of violations.
Small systems comprise vast majority of Division’s workload—The
Division may be able to greatly reduce the number of significantly noncompliant
systems by expanding its water testing assistance program for small systems. The
majority of drinking water systems on the Drinking Water Priority Log are relatively
small. For example, about 100 facilities on the March 2004 Drinking Water Priority Log
serve 10,000 or fewer connections, including some that could serve as few of 25
connections. Therefore, if the number of compliant small systems were increased,
the Division’s enforcement workload would likely be notably reduced.
Expanding MAP assistance could potentially reduce small system
violations—The Division may be able to decrease the number of monitoring
violations by expanding the breadth of testing provided under MAP. Specifically, MAP
charges members fees and hires a private contractor to conduct some required
water quality tests and report the results directly to the Division. All public water
systems that serve fewer than 10,000 service connections are required to participate
in the program, although those that serve more than 10,000 connections can also
join voluntarily.
As exempted by statute, MAP does not conduct all of the tests that public drinking
water systems are required to perform, such as those for lead, copper, and nitrates.
MAP participants must therefore obtain these tests on their own, but many are not
doing so. If MAP were expanded to provide all the required testing, the number of
monitoring and reporting violations by small water systems should significantly
decrease. Division staff estimate that approximately 95 percent of the small systems
on the priority log are on the log exclusively for monitoring or reporting violations.
State of Arizona
page 10
About 100 facilities on the
March 2004 Drinking
Water Priority Log serve
10,000 or fewer
connections.
Expanding MAP’s testing
may decrease the
number of monitoring
violations.
Expanding MAP to include additional testing would require statutory and rule
changes. A.R.S. §49-360(A)(3) explicitly excludes copper, lead, and nitrate testing
from MAP. The Division also interprets this statute to effectively exclude total coliform
from MAP. In addition, the Division would need to increase program fees currently
listed in Arizona Administrative Code R18-4-225 to cover the costs of the additional
tests. According to division data, the total annual cost of MAP for calendar year 2003
was $954,000. The Division estimates that the program would need to collect at least
an additional $700,000 per year to cover such a program expansion. While this would
mean an increase in the fees that systems would have to pay, in theory some of these
added costs would be no higher than the amount that participating systems are
supposed to be paying to conduct the tests themselves. Further, it may be possible
to minimize some new costs by allowing facilities to collect some water quality testing
samples themselves and then pay only for the outside analysis of those samples.
An expansion would also provide an opportunity to review how fees are assessed.
Currently, participants pay an annual fee of $250 and $2.57 per meter or service
connection. The Division reports that this structure results in relatively larger
participants effectively subsidizing tests conducted for smaller participants. However,
if MAP is expanded, this could be reviewed and changed, if needed, to ensure that
test costs are fairly shared.
Although division management reports that expanding MAP could require statutory
changes, fee increases, and a change in the fee structure, the potential benefits
could be substantial. Therefore, the Division should research the costs and benefits
of expanding MAP to help small systems come into compliance and thereby reduce
the Division’s compliance and enforcement workload.
Division should review enforcement staff levels in future
The Division should evaluate its enforcement staffing levels in the future. The
Division’s enforcement staff was reduced from five to three drinking water officers
between July 2000 and November 2003.1 Specifically, the Department reports it
eliminated these two positions as a result of funding reductions passed by the
legislature in 2002.2 The Division reports that it needs two new enforcement staff, for
a total of five enforcement staff, to better handle its workload. However, the number
of additional drinking water enforcement staff needed cannot be reliably estimated
until the Division decides whether to expand MAP. Further, if MAP is expanded, the
Division should wait to evaluate staffing needs until the program has had an
opportunity to reduce the number of violating systems.
Office of the Auditor General
page 11
1 In addition to three enforcement staff who work out of the Division’s central Phoenix office, regional office staff also assist
the Division in addressing water quality issues. Similarly, the Division employs another three officers who focus on
wastewater facilities. In addition, the Division reports that it is in the process of hiring for a new position that will provide
analysis of drinking water system compliance on a weekly basis.
2 Laws 2002, Chapter 1, §18 required the Department to eliminate a total of 51 positions, but did not specify which positions
The number of additional
drinking water
enforcement staff needed
cannot be reliably
evaluated until the Division
decides whether to
expand MAP.
Recommendations
1. The Division should research the costs and benefits of expanding its Monitoring
Assistance Program to help small water systems carry out all of their testing
requirements and come into compliance, thereby reducing the Division’s
compliance and enforcement workload.
2. After the Division decides whether to expand the Monitoring and Assistance
Program, and any changes have taken effect, the Division should review its
Drinking Water enforcement workload and staff levels to determine whether
additional staff are needed.
State of Arizona
page 12
Office of the Auditor General
page 13
Division should charge fees for drinking water
plan reviews
The Division should charge fees to applicants for performing drinking water plan
reviews. Statute requires the Division to establish and charge fees to recover the
costs of these reviews, which are for the planning and construction of facilities
ranging from wells and water treatment plants to public swimming pools. However,
in response to opposition from the regulated community, which believed the costs
would be too great for small water companies, the Division does not charge any such
fees, and uses General Fund monies and a federal grant to support the function
instead. Although the Division does not charge fees, the counties that the Division
has authorized to conduct these reviews already charge fees and have done so for
years. To comply with statute, reduce the review function’s reliance on the General
Fund, and potentially free federal grant monies for other purposes, the Division
should take steps to put drinking water plan review fees in place. To establish these
fees, the Division will need to begin tracking the hours it spends reviewing
applications, and could use forms and processes already used by other plan review
functions within the Department.
Division performs drinking water plan reviews
The Division is charged by A.R.S. §49-353(A)(2) to perform pre- and post-construction
plan reviews of drinking water facilities and issue Approvals to Construct
(ATCs) and Approvals of Construction (AOCs), or delegate this responsibility to local
governments.1 Facilities requiring reviews range from complex water treatment plants
to simple wells serving 25 people, and also include public spas and swimming pools.
The Division’s unit that performs the reviews also performs informal consulting,
fielding phone calls and e-mails from builders and potential applicants regarding
issues such as application requirements and general engineering questions.
The Division reviews
plans for drinking water
facilities, spas, and
swimming pools.
1 A.R.S. §49-107 allows the Division to delegate duties to local governments. The Division currently delegates drinking
water facility plan and construction review authority to Maricopa, Pima, Yavapai, and Yuma Counties, and the cities of
Flagstaff, Kingman, and Sierra Vista. The level of authority delegated to each local jurisdiction varies, depending on the
delegation agreement between the Division and the local jurisdiction.
FINDING 2
State of Arizona
page 14
Plan review costs are
supported mainly by
General Fund and
federal grant monies.
Applications for ATC Certificates generally include detailed construction plans and
specifications, a design report, and any other data necessary to understand the
plans. A division engineer reviews the plans and determines whether they provide for
the use of appropriate materials, the development of adequate water volume
capacities, and the appropriate levels of water quality. If the engineer finds the plans
to be technically sound, the Division will issue the applicant an ATC Certificate,
approving the plans and authorizing construction on the project.
Upon receiving an ATC, an applicant has 1 year to begin construction of the facility.
Once the facility has been constructed, the applicant must request an Approval of
Construction (AOC) Certificate from the Division. Similar to the ATC process, the
applicant submits an application to the Division, this time including a professional
engineer’s Certificate of Completion, “as-built plans,” inspection and testing data,
and an operations and maintenance manual. A division engineer verifies that the
project was built in accordance with the approved plans, and an AOC Certificate is
issued.1
The Division does not currently track the actual number of hours it spends reviewing
applications. However, the Division estimates that it generally spends between 140
and 210 hours reviewing each ATC application, and between 35 and 70 hours
reviewing each AOC application.2 According to the Division, it reviewed 316
applications for ATCs and 259 applications for AOCs in fiscal year 2003. Of those, 37
ATC and AOC applications were for public pools or spas, and the remainder were for
other drinking water facilities.
Division does not charge fees
Despite a statutory requirement to charge fees for drinking water plan reviews, the
Division does not do so. However, the counties with delegated review authority
currently charge review fees and have done so for many years.
Division does not charge fees—The statute requiring the Division to perform
drinking water plan reviews also requires the Division to charge fees to recover the
review costs.3 However, the Division does not charge fees for the reviews, and
instead pays for the plan review costs primarily from State General Fund monies and
a discretionary federal grant.4 According to the Division, the cost of performing
The Division reviewed
316 ATC applications
and 259 AOC
applications in fiscal
year 2003.
1 If a facility is not constructed in accordance with approved plans, the Division requires remediation before issuing an
AOC. As provided for in Arizona Administrative Code R18-4-507(A) and R18-5-204(A), drinking water facilities may not be
operated without an AOC.
2 According to the Division, the broad range in the amount of hours it spends reviewing applications is related to the
complexity and size of facilities being reviewed. For example, large, complex water treatment facilities are likely to require
a relatively high number of review hours. In contrast, simpler projects, primarily reviewed by the delegated counties, may
require as few as 4 or 5 hours of review time.
3 A.R.S. §49-353(A)(2) requires the Division to charge fees to recover drinking water plan review costs.
4 The source of the federal grant monies used to fund the drinking water reviews is the EPA’s Performance Partnership
Grant. This grant gives recipients discretionary spending authority for water quality programs.
Office of the Auditor General
page 15
drinking water plan reviews in fiscal year 2003 was approximately $676,200. Of this
amount, approximately $346,300 came from the General Fund, $271,500 from
federal grant monies, and $58,400 from the Water Quality Fee Fund.1
The Division wanted to adopt rules establishing drinking water plan fees in 1996, but
withdrew them in response to strong opposition from the regulated community. Many
stakeholders contended that the economic burden of the fees would be too great for
small water companies, as they were already operating at or near a loss and had a
difficult time recovering costs. For this audit, auditors interviewed three key industry
representatives and found that they recognize the Division’s need to charge fees to
recover review costs; however, some industry concerns from 1996 appear to remain.
Specifically, representatives reported that they either doubt the Arizona Corporation
Commission’s willingness to increase rates or feel the approval process is too slow
to be economically viable for small water facilities.
Delegated counties charge
fees—Despite industry’s
concerns about the effect of fees
on small water companies, all
counties that have received
delegated authority from the
Division to perform drinking water
plan reviews already charge fees
for these services, as illustrated in
Table 2. Further, although industry
strongly opposed the Division
wanting to establish fees in 1996,
Maricopa and Pima County
representatives report that they
have been charging fees long
before 1996, without significant
industry opposition. In fiscal year
2003, the delegated counties,
including Maricopa, Pima, Yavapai,
and Yuma, reviewed a total of
approximately 1,300 and 875 ATC
and AOC applications,
respectively, compared to the Division, which reviewed 316 and 259 ATC and AOC
applications, respectively.2 According to division records, 477 of the 877 small water
systems in Arizona fall within these counties.3
Some industry
representatives
recognize the Division’s
need to charge fees.
1 The Water Quality Fee Fund was established by A.R.S. §49-210 and can be used for issuing aquifer protection permits
(APPs), APP registration fee procedures, drywell registration fee procedures, technical review fee procedures, and
inspection fee procedures.
2 According to the Division, some Pima County applicants opt for a division review rather than a county review, thus
avoiding fees.
3 For this analysis, auditors considered systems serving 10,000 or fewer connections to be small systems, in accordance
with the Monitoring Assistance Program discussed in Finding 1 (see pages 7 through 12).
Table 2: Drinking Water Plan Review Fees
Charged by Counties
As of February 2004
County Fee Comments
Maricopa $70 / hour
Pima Flat fees ranging from
$500 to $1,000/application
No authority to review pools and spas
Yavapai $90/ hour for incorporated areas Authority to review only pools, spas, and
extensions of existing water sources;
incorporated-area reviews contracted to private
engineering firms; unincorporated-area review
fees cannot be determined, as they are
included with sewer review fees
Yuma $80/hour for line extensions; $275 flat
fee for pools and spas
County reviews line extensions; more complex
reviews contracted to a private engineering firm
Source: Auditor General staff compilation of county fee schedules for drinking water plan reviews.
State of Arizona
page 16
Division should use proven methods to develop fees
In order to comply with A.R.S. §49-353, the Division should establish, by rule, fees for
drinking water plan reviews. The resulting fee revenues will allow the Division to
reduce the review function’s reliance on the General Fund. Further, the fee revenues
may allow the Division to free up the review function’s federal monies, which,
because they are part of a discretionary grant, could be reallocated to support other
programs or functions that are in line with the grant’s requirements. However,
because of timing differences between review costs and revenue collections, the
Division may need to phase out its reliance on the current funding structure over a
period of time, as fee revenue is received.
In addition, although A.R.S. §49-353 does not specify a fee structure the Division
must follow, the Division should use an approach used by other department plan
review functions or by the counties that conduct drinking water plan reviews on a
designated basis. Currently, these organizations charge either hourly rates or flat
fees. Whichever method is used, the Division will need to begin tracking the hours it
spends reviewing applications to ensure an accurate fee structure. Perhaps the
easiest way for the Division to do this is to use the processes already used by other
department review functions. Specifically, the Division’s wastewater plan review
function and the Waste Programs Division’s solid waste plan review function require
employees involved with the review process to record the time they spend on certain
plans each pay period. Both functions have developed detailed forms and
procedures for their time-tracking methods, which the Division could readily adopt.
Recommendations
1. To comply with A.R.S. §49-353 and lessen reliance on the State General Fund,
the Division should establish, by administrative rule, fees for performing drinking
water plan reviews.
2. To establish the fees, the Division should begin tracking the hours it spends
reviewing applications, and, in doing so, should consider using the forms and
processes already used by other department plan review functions.
The Division could use
existing methods to set
fees.
Office of the Auditor General
page 17
Division has made significant progress in
processing APP applications
Although the Division has made significant progress in issuing nonmining Aquifer
Protection Permit (APP) applications, a significant number of mining APP
applications remain to be processed. These permits, required since 1986 to help
ensure that Arizona’s aquifers are protected, have historically experienced lengthy
delays. However, the Division has made significant progress in addressing its past
backlog, and auditors’ review of division data indicates that one nonmining facility’s
permit was pending as of December 2003. Although permits remain outstanding for
about one-third of mining facilities, the Division has developed a strategy to help
address these remaining facilities.
APP permits intended to protect groundwater
One of the Division’s key responsibilities is to limit discharges to the State’s
groundwater and surface waters. In 1986, the Legislature enacted the Environmental
Quality Act, which established a comprehensive groundwater protection program for
Arizona. The Act requires the Department to regulate the discharge of pollutants. In
response, the Division developed the APP program, which aims to ensure that
contamination from sources such as wastewater treatment plants, industrial facilities,
and mines does not reach the aquifer. The aquifer is a layer of permeable rock, sand,
or gravel through which groundwater flows, containing enough water to supply wells
and springs (see Figure 1, page 18). Arizona is significantly dependent on aquifers
for its water supplies.
FINDING 3
APPs restrict discharge
to aquifers.
State of Arizona
page 18
If the Division identifies a facility that discharges or may discharge into the aquifer, it
notifies the facility that it might be required to apply for an APP. If the facility fails to
reply to the Division’s notice, it is referred to the Compliance Section, which may take
enforcement action.
Division offers different types of APPs
The APP program allows facilities to operate under two types of APPs, general and
individual, both intended to protect Arizona’s aquifers. General permits, which are
created and approved through the rule-making process, regulate similar facilities and
activities. Specifically, the Division can use general permits for certain types of
discharges to the aquifer, such as septic tanks and vehicle- and equipment-washing
facilities, that meet statutory criteria.
In contrast, individual permits are more flexible. They allow the Division to customize
the permit specifically for the individual facility, and the contents of the permit
language are negotiable to meet the facility’s specific needs. Additionally, individual
APPs must go through a public notice period and, in some instances, a public
hearing. As a result, individual APPs are more complex than general APPs and
require more staff time to review and process.
Figure 1: Components of an Aquifer
Source: Gulf of Maine Research Institute (www.gma.org). Used with
permission.
1. Well
2. Spring
3. Clay
4. Sand or gravel
5. Rock
6. Water fills up spaces
between grains of sand
Office of the Auditor General
page 19
The Division has
historically struggled to
issue APPs in a timely
manner.
The Division issues four types of individual APPs, each to a different type of facility,
which could potentially pollute Arizona’s aquifers:
􀁺􇩉 Industrial APPs—Industrial sites can potentially pollute Arizona’s aquifers in a
variety of ways, depending on the nature of the facility. For example, runoff from
car- and truck-washing facilities and discharges from power-generating facilities
can reach and potentially pollute an aquifer. The Division has issued 186
individual industrial APP permits out of 231 facilities.
􀁺􇩍 Mining APPs—Mining facilities sometimes use toxic chemicals, which can
eventually reach the aquifer. For example, copper mining operations often use
toxic chemicals to separate copper ore from rock. These chemicals can migrate
into the aquifer and, therefore, are restricted by an APP. The Division has issued
40 individual mining APP permits out of 98 facilities.
􀁺􇨠 Wastewater APPs—Wastewater facilities can leak, resulting in aquifer
contamination. For example, sewage from treatment plants can be released and
contaminate groundwater. Auditors’ review of division data indicates that the
Division has issued 307 individual wastewater APP permits out of 391 facilities.
􀁺􇨠 Drywell APPs—Drywells are man-made shafts or holes that can directly funnel
contaminated water into the aquifer. As a result, drywells that are used to handle
fluid other than stormwater runoff are subject to the APP requirements. Auditors’
review of division data indicates that the Division has issued 31 individual drywell
APP permits out of 45 facilities.
Division has made progress in processing nonmining
APP permits, but a significant number of mining APP
permits remain to be issued
The Division has made strides in addressing APP applications for nonmining
facilities. Historically, the Division has had difficulty processing APP applications in a
timely manner. However, the Division has made significant strides in processing
individual, APP permits for nonmining facilities (industrial, wastewater, and drywell) by
developing and implementing a strategy known as OPERA (Operation Permit
Arizona). Similarly, the Division is further refining this approach to address the
remaining mining APP applications as a statutory 2006 deadline approaches.
Prior audits identified APP permit processing backlogs—Historically,
the Division has had difficulty processing APP applications in a timely manner. In
1992, the Legislature gave the Division a deadline of 2001 to eliminate its APP
application backlog, including general and individual permits for all permits. In 1993,
State of Arizona
page 20
the Auditor General reported (Report No. 93-5) that an estimated 650 facilities would
require an individual APP as of that time, but the Division had issued a total of only
63 APPs since 1986, when APPs were created. In 1999, the Legislature extended the
deadline to 2004 for nonmining facilities, including industrial facilities, and 2006 for
mining facilities. In that same year, the Auditor General reported (Report No. 99-21)
that the Division still had at least 255 nonmining facilities that had not yet received an
APP.
OPERA helped Division process nonmining permits–Using a
department-wide strategy known as OPERA, department staff processed all but one
of the nonmining APP applications it had received. As of December 2003, Division
data indicates that the Division had issued a total of 524 individual, nonmining
permits and one application for nonmining facilities was pending. Further, data
indicates that the Division referred approximately 23 nonmining facilities to the
Division’s compliance unit for a variety of reasons, including failing to submit an
application for a needed APP permit. Similarly, division data indicates that 61
nonmining applications have been denied or withdrawn.
OPERA, a department-wide concentrated effort created in February 2002,
contributed to the Division’s processing of nonmining applications. OPERA included
several key changes to the Division’s usual procedures. The most significant change
was a shift to an enhanced customer assistance focus, under which the Division
assumed the burden of assembling much of the information that it had previously
relied on the applicant to provide. For example, the Division attempted to supply any
missing information from existing data or technical journals, or from other ADEQ
sources before formally requesting the information from the applicant.
OPERA also provided a streamlined, defined process through which all permits were
handled. In the initial phase of OPERA, the Division notified the facility
owners/operators that they need to apply for an APP. Next, the Division categorized
each application by type, which determined how it would be processed. Because the
permit section did not have enough staff to handle all of the applications, some
processing work was reassigned to staff from other areas within the Department who
had a background in and knowledge of the APP permitting process. In addition, the
Division developed a comprehensive APP manual to provide guidance and training
to staff for processing APPs, as recommended by the 1992 audit (see Auditor
General Report No. 99-21).
Division implementing strategy to eliminate remaining mining APP
applications—While the Division has significantly addressed its remaining non-mining
APP applications, numerous mining APP applications are still pending.
However, the Division has developed plans to assist in resolving the remaining
applications by the 2006 statutory deadline.
A department-wide
effort helped process
nonmining applications.
At least 34 APP mining permits have not yet been issued. Specifically, auditors’
review of division data indicates that applications for 13 mining facilities were in
process as of December 2003. Additionally, the division data indicates that another
10 applications were considered past due, meaning that an anticipated APP
application had not yet been received. Division data also indicates that it has referred
another 11 facilities to its compliance unit. Before the 2006 deadline, the Division will
need to take some sort of action regarding these facilities. For example, if the Division
receives applications for these facilities, it will need to process them. Conversely,
those facilities that fail to submit required APP applications will need to be referred to
the Division’s Compliance Unit for appropriate enforcement action.
The Division has developed a new strategy, OPERA2, to assist in resolving the
remaining applications. Largely based on OPERA, this effort started in January 2003
and involves three main strategies:
􀁺􇩐 Past-Due List—The Division has created a list of mining facilities that are
required to submit an APP application, but have failed to do so. The Division has
already sent letters to these facilities notifying them that they need to submit an
APP application.
􀁺􇨠 Prioritization Schedule—The Division has created a schedule to track each
application through the various processing stages. Division management report
that they are using this schedule to monitor the progress of each application
through the permitting phases, including the percentage of work completed
within each phase.
􀁺􇨠 Completion Analysis—Technical reviews are conducted biweekly to help identify
each application’s current status and ensure adequate staffing resources are
available to complete needed reviews. Similar to OPERA, division and section
managers have reassigned work to staff from other areas within the Division who
have background knowledge of the APP permitting process.
Recommendation
This finding presents information only. Therefore, no recommendations are
presented.
Office of the Auditor General
page 21
State of Arizona
page 22
Office of the Auditor General
page 23
1 As discussed in Finding 3 (pages 17 through 21), individual APPs are developed to meet the specific needs of individual
facilities, whereas general APPs are standardized permits developed for facilities with defined discharges.
Division could more accurately recover APP costs
The Division should change the way it calculates and applies the fees it charges for
processing APP applications. Statute requires the Division to charge fees that will
recover the direct costs of processing applications up to a set maximum. However,
the Division did not develop the current fees in keeping with cost accounting
principles and has not recalculated the fees for several years. As a result, the current
fee level may not be correct. Further, the Division does not charge fees for all direct
activities, resulting in decreased revenues. To ensure an accurate, fair fee level, the
Division should regularly recalculate its fees using appropriate methods, and should
apply the fees consistently. Regular recalculations are also needed so that the
Division may provide an accurate report on the adequacy of statutory maximum fees
to the Legislature in 2009.
APP program charges user fees
As discussed in Finding 3 (see pages 17 through 21), the Division established the
APP program to regulate facilities that could potentially discharge pollutants into
groundwater. The program is a state rather than a federal requirement, and does not
receive any federal assistance. Instead, it operates on a combination of General
Fund monies and user fees.
As allowed by statute, the Division charges fees for the APP program’s two major
activities: 1) processing individual and general permit applications, and 2) performing
“post-permitting” activities for individual permits, such as annually registering
permits, tracking compliance with monitoring and reporting requirements, and
conducting inspections to ensure permit requirements are met.1 The fee schedule for
post-permitting activities (which the Division categorizes as annual registration fees)
is outlined in A.R.S. §49-242(E). Additionally, A.R.S. §49-241 allows the Division to
develop fees for processing permit applications. A 1992 session law also clarified
FINDING 4
State of Arizona
page 24
that APP processing fees must be set at the level necessary for recovering the
“reasonable direct costs” of the processing function. The text box below contains
general definitions for “direct costs” and, for comparison purposes, “indirect costs,”
in accordance with cost accounting principles.
To recover the costs of the APP processing function, the Division developed an hourly
fee rate for individual APPs and various flat fees for general APPs. As of January
2001, the Division charges applicants an hourly fee of $61 per hour to process
individual APPs, and various flat fees ranging from $300 to $1,800 to process general
APPs. According to division records, the Division generated approximately $1.2
million from APP processing fees in fiscal year 2003.
Division could better ensure accurate cost recovery
To help ensure the accurate recovery of costs, the Division should make sure its APP
processing fees are appropriately calculated and applied. The current fees are
generally based on the costs and billable hours associated with the Division’s Water
Permits Section (Section), which processes the APPs.1,2 However, auditors’ review
of the fees found that the Division did not appropriately calculate the costs that could
be recovered by the fees (recoverable costs), has not recalculated the fees to reflect
changes to costs and hours, and does not charge fees for all direct activities.
􀁺􇩆 Fees not based on direct costs—Rather than calculating the actual direct costs
to be recovered by the fees, the Division based recoverable costs on available
General Fund monies. Specifically, the Division estimated how much it expected
the Section to receive in General Fund monies in fiscal year 2002 based on
1 The Division considers billable hours to be those hours that technical staff, such as environmental engineers,
hydrologists, and project managers, spend working on a client’s specific project.
2 The Division did not include costs associated with the Water Permits Section’s Federal Permits/Program Development
Unit when calculating Aquifer Protection Permit processing fees.
Direct Costs—Costs that can be easily and accurately traced to a cost objective, such as a
division, program, or function, and are clearly identifiable. Common examples are travel
expenses and compensation for employee time dedicated to the cost objective.1
Indirect Costs—Costs that benefit multiple cost objectives, but cannot be easily and accurately
traced to any individual cost objective. A common example is the cost of utilities that benefit
numerous cost objectives.1
1 There is no universal rule for classifying costs as either direct or indirect under every accounting system. These
examples are intended to illustrate items that are typically considered to be direct versus indirect costs.
Source: OMB Circular A-87, Attachment A, Sections D, E, and F; Hansen, Don R. and Mowen, Maryanne M., Cost Management, Second
Edition. South-Western College Publishing, Cincinnati: 1997.
Fees are based on
General Fund allocation
rather than direct costs.
Office of the Auditor General
page 25
historical information, subtracted the estimate from total estimated section
costs, and developed the fees to recover the remaining amount. However, while
General Fund monies are allocated to the Section using a variety of methods,
they are not allocated based on the Section’s direct or indirect costs.1
􀁺􇩆 Fees based on obsolete estimates—The Division has not recalculated fees
since 2001. However, billable hours and costs can change over time. For
example, based on the Division’s 2002 analysis of billable hours, the percentage
of billable hours decreased from 62 percent in 2001 to 45 percent in 2002.2 In
short, because the Division did not recalculate the fees annually, the current fees
are based on obsolete estimates of billable hours and costs associated with the
Section.
􀁺􇩓 Some direct costs not charged—As a result of negotiations with the regulated
community, the Division does not charge for time traveling to permit sites.
However, this activity falls under the definition of a direct cost (see text box, page
24), as it may be easily identified with the APP processing function. According
to the Division, the section’s technical staff spent approximately 246 hours
traveling in fiscal year 2003. If the Division had billed that time at the current
hourly APP rate, it may have been able to recover approximately an additional
$15,000.
To ensure that fees for processing APP applications recover related costs, the
Division should recalculate its APP processing fees based on actual direct costs
rather than estimated General Fund monies, and should regularly recalculate fees to
reflect changes to direct costs and billable hours. Further, the Division should charge
fees for time traveling to permit sites. Finally, after these changes have been made
so that it is accurately recouping its direct costs through appropriate fee levels, the
Division should also ensure its future General Fund appropriation request to the
Legislature reflects true indirect costs for issuing APP permits.
Fees should be recalculated before maximum fees are
analyzed
Correct calculation of the fees is also important because the revenue associated with
the fees will eventually be used to analyze current statutory fee limits. The Division’s
ability to recover the APP processing function’s direct costs is limited by maximum
fees that may be charged for any one application, as provided for in A.R.S. §49-
241.02. Statute also requires the Department to analyze the adequacy of the
Division does not
charge applicants travel
costs.
1 The Water Permits Section receives General Fund monies from two sources: a) Appropriations from the APP Program
Special Line Item (SLI), and b) allocations from the Department of Environmental Quality’s operating lump sum
appropriation. The APP Program SLI is appropriated using incremental budgeting, and the operating lump sum allocation
is based on costs not recovered by the APP Program SLI and user fees.
2 Division officials indicated that the percentage of billable hours in 2002 was unusually low due to staff incorrectly coding
their time.
Fee levels should be
recalculated before
statutory fee cap
changes are
considered.
maximum fees, taking into consideration the fee revenues, and issue a report to the
Legislature by August 31, 2009. To help ensure the accuracy of its report, the Division
should take steps outlined in this finding to recover appropriate costs.
Recommendations
1. The Division should regularly recalculate its APP processing fees based on:
a) Actual direct costs rather than on General Fund contributions; and
b) Up-to-date estimates of direct costs and billable hours.
2. In light of generally accepted definitions of direct costs, the Division should
charge for time traveling to permit sites.
3. Once the Division has set its fee levels to accurately recoup its direct costs to
process APP applications, it should ensure that its future General Fund
appropriation requests to the Legislature reflect the true indirect costs.
State of Arizona
page 26
Office of the Auditor General
AGENCY RESPONSE
State of Arizona
p
ARIZONA DEPARTMENT
OF ENVIRONMENTAL QUALITY
1110 West Washington Street 􀁹􇥐 Phoenix, Arizona 85007
Janet Napolitano (602) 771-2300 􀁹􇤠 www.adeq.state.az.us
Governor
Stephen A. Owens
Director
Northern Regional Office
1515 East Cedar Avenue 􀁹􇤠 Suite F 􀁹􇤠 Flagstaff, AZ
86004
(928) 779-0313
Southern Regional Office
400 West Congress Street 􀁹􇤠 Suite 433 􀁹􇤠 Tucson, AZ
85701
(520) 628-6733
Printed on recycled paper
August 16, 2004
Debra K. Davenport, CPA
Auditor General
2810 North 44th Street, Suite 410
Phoenix, AZ 85018
Re: Performance Audit and Sunset Review—Water Quality Division
Dear Ms. Davenport:
The Arizona Department of Environmental Quality appreciates the opportunity to respond to the
Water Quality Division (the Division) performance audit report. The report is a useful
assessment of the Division’s efforts to monitor drinking water quality and to process Aquifer
Protection Permits. We thank the Office of the Auditor General for its effective communication
throughout the audit process.
As you know, the revenue and budget reductions of the past few years have presented a
challenge to state agencies. ADEQ has lost staff but faced an increased work load to assess and
increase security and to address new federal regulations. Despite these challenges, the Water
Quality Division, indeed the entire Department, always achieved its mission “to protect and
enhance public health and the environment by ensuring safe drinking water and reducing the
impact of pollutants discharged to surface and groundwater.” We are proud of our
accomplishments.
As the audit indicates, ADEQ has exceeded its obligation to issue Aquifer Protection Permits to
non-mining facilities in Arizona. The Legislature, in 1999, created a statutory deadline of
January 1, 2004 for this Department to complete the necessary permitting for existing non-mining
facilities under the Aquifer Protection Permit program. ADEQ addressed permitting
requirements for the then 255 existing, unpermitted, non-mining facilities, in addition to the
more than 100 applications for new facilities the Department receives every year. It was an
extraordinary challenge, but Water Quality Division staff and others within the Department
worked together to meet this requirement in advance of the deadline. Additionally, the audit
indicates that ADEQ is on track to meet its obligation to issue Aquifer Protection Permits to
mining facilities before January 1, 2006. As a result, APP permit applicants no longer will wait
behind a backlog of permit applications, and our groundwater is better protected.
The audit concludes that the Division should take steps to appropriately recover its costs of
issuing Aquifer Protection Permits. ADEQ began this process in 2004. At the request of the
Ms. Davenport Page 2 of 5
August 16, 2004
Department, the Forty-sixth Legislature increased the maximum fee cap for processing an APP
application. H.B. 2190, signed by the Governor May 19, 2004 and effective immediately upon
her signature, increased the maximum fee to $100,000, eliminating any of the prior formula-driven
maximum fees and making the $100,000 maximum fee retroactive for all permits in
process. This change in the maximum fee, and a facility’s ability to waive the fee should it
desire to do so, will allow the Division to capture all of its billable costs associated with issuing
APPs.
Other Water Quality Division efforts also deserve recognition. Much has been written about the
new, more stringent, federal standard for arsenic in drinking water and the difficulties Arizona
water supplies may have meeting that standard. Arsenic occurs naturally in many parts of our
state, and some of the most affected communities are those least able to afford the costs of
treatment. Knowing this, the Water Quality Division—and this Department—took the initiative
to construct Arizona’s Arsenic Master Plan—a guide for small water systems for identifying the
most effective and least costly method to ensure compliance with the new drinking water
standard. The Arsenic Master Plan assists the Arizona Corporation Commission in its efforts to
approve appropriate rates for private water systems; it enables community leaders to understand
the decision process that must occur before a treatment technology is selected; and it helps small
water systems find the right sources of funding and technical expertise.
Also, in late 2002, ADEQ received federal approval to manage the federal Clean Water Act
permitting program as a state program. In the eighteen months since the Department has
managed this program, we have created 3 general permits designed to make it easier for
business, agriculture and local governments to comply with surface water quality requirements.
Additionally, the Department is implementing more customer-focused “e-government”
initiatives, with the advent of the “SMART NOI” application, allowing those subject to the
construction storm water permit to file their Notice of Intent to discharge online.
The Water Quality Division is focused on making Arizona’s waters clean and safe, for drinking,
recreating, and for fish and wildlife, and for protecting Arizona’s groundwater for drinking water
purposes. Much has been accomplished and more remains to be done. It is in that spirit that we
receive the audit of the Auditor General and provide the following response.
FINDING 1: DIVISION COULD IMPROVE ITS OVERSIGHT OF DRINKING WATER
QUALITY MONITORING.
Compliance with environmental regulations is a priority for this administration and the Division
has undertaken many improvements to its enforcement process, in addition to issuing nitrate
reminder letters, which are an effective enforcement tool as noted in the performance audit. To
allow more rapid problem identification and response, as of November 2003 the Division uses
automatically-generated letters to notify facilities of any failure to meet monitoring and reporting
requirements, which require a response within 10 days. If the facility fails to respond within 10
days, the Division sends an automatically-generated Notice of Violation for Failure to Monitor
and Report, which requires a response within 15 days. If the facility does not respond to the
NOV, the Division issues a Compliance Order with a mandatory penalty. This compliance
strategy has resulted in 82 Compliance Orders, Consent Orders, and NOVs issued as of June 30,
Ms. Davenport Page 3 of 5
August 16, 2004
2004. Many other water systems returned to compliance without the need for escalated
enforcement. Significantly, the FY 2004 4th quarter SNC report indicates the number of water
systems in “significant noncompliance” has dropped by approximately 40 percent. ADEQ also
has increased its focus on compliance assistance to ensure that those who want to comply with
environmental regulations, but struggle, receive the assistance they need. On the other hand, we
have made clear that we will take aggressive action against those who do not take compliance
with Arizona’s environmental regulations seriously. Indeed, ADEQ has issued orders or settled
a lawsuit in several significant cases since January 2003.
Although the audit suggests additional output performance measures, it is important to note that
the Water Quality Division’s Compliance Section has three outcome performance measurements:
(1) a 95% compliance with health based drinking water standards by 2005; (2) a 90%
compliance rate for major dischargers in targeted watersheds (the watersheds rotate every year);
and (3) by 2005, a 90% compliance rate for meeting drinking water MCLs, surface water quality
standards, and aquifer water quality standards. ADEQ will be pleased to consider whether
additional measures are needed.
RECOMMENDATIONS
1. The Division should research the costs and benefits of expanding its Monitoring
Assistance Program to help small water systems carry out all of their testing requirements
to come into compliance, thereby reducing the Division’s compliance and enforcement
workload.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
2. After the Division decided whether to expand the Monitoring Assistance Program, and
any changes have taken effect, the Division should review its Drinking Water
enforcement workload and staff levels to determine whether additional staff are needed.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
FINDING 2: DIVISION SHOULD CHARGE FEES FOR DRINKING WATER
ENGINEERING REVIEWS.
RECOMMENDATIONS
1. To comply with A.R.S. §49-353 and lessen reliance on the State General Fund, the
Division should establish by administrative rule fees for performing drinking water
engineering reviews.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Ms. Davenport Page 4 of 5
August 16, 2004
2. To establish the fees, the Division should begin tracking the hours it spends reviewing
applications and, in doing so, should consider the forms and processes already used by
other department engineering review functions.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
FINDING 3: DIVISION HAS MADE SIGNIFICANT PROGRESS IN PROCESSING APP
APPLICATIONS.
This finding presents information only. Therefore, no recommendations are presented.
The Department would like to clarify that currently 48 general permits are available under the
APP Program. More importantly, the Department thanks the Auditor General for
recognizing the Division’s significant achievement of eliminating the backlog of non-mining
Aquifer Protection Permit applications.
FINDING 4: DIVISION SHOULD RECALCULATE APP PROCESSING FEES.
The audit notes that the Division based its recoverable costs for processing APP permits in part
on the General Fund moneys appropriated by the Legislature for that purpose. When the
Division calculated the current APP processing fees in 2001, it used a method based upon
assigning to its General Fund sources appropriated by the Legislature and allocated within the
Department the indirect, or non-billable, costs related to the water protection services defined in
rule. This method was a reasonable approach that was responsive to concerns of stakeholders
and embodies the compromise struck by the Legislature. While this method complies with the
legislative directive to charge no fee for indirect, or non-billable, costs, we recognize that the
current fees may not capture all the direct, billable and indirect, non-billable costs of APP
processing activities.
RECOMMENDATIONS
1. The Division should regularly recalculate its APP processing fees based on:
a. Actual direct costs rather than on general fund contributions; and
b. Up-to-date estimates of direct costs and billable hours
The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
2. In light of generally accepted definitions of direct costs, the Division should charge for
time traveling to permit sites.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Ms. Davenport Page 5 of 5
August 16, 2004
Thank you for the opportunity to respond to the performance audit and Sunset review for the
Water Quality Division.
Sincerely,
Stephen A. Owens
Director
02-06 Arizona Health Care Cost
Containment System—Rate
Setting Processes
02-07 Arizona Health Care Cost
Containment System—Medical
Services Contracting
02-08 Arizona Health Care Cost
Containment System—
Quality of Care
02-09 Arizona Health Care Cost
Containment System—
Sunset Factors
02-10 Department of Economic
Security—Division of Children,
Youth and Families, Child
Protective Services
02-11 Department of Health
Services—Health Start
Program
02-12 HB2003 Children’s Behavioral
Health Services Monies
02-13 Department of Health
Services—Office of Long Term
Care
03-L1 Competitive Electric Metering,
Meter Reading, and Billing
and Collections
03-01 Government Information
Technology Agency—
State-wide Technology
Contracting Issues
03-02 Registrar of Contractors
03-03 Water Infrastructure Finance
Authority
03-04 State Board of Funeral
Directors and Embalmers
03-05 Department of Economic
Security—Child Protective
Services—Foster Care
Placement Stability and
Foster Parent Communication
03-06 Arizona Board of Appraisal
03-07 Arizona Board for Charter
Schools
03-08 Arizona Department of
Commerce
03-09 Department of Economic
Security—Division of
Children, Youth and Families
Child Protective Services—
Caseloads and Training
04-L1 Letter Report—Arizona Board
of Medical Examiners
04-L2 Letter Report—Gila County
Transportation Excise Tax
04-01 Arizona Tourism and
Sports Authority
04-02 Department of Economic
Security—Welfare Programs
04-03 Behavioral Health Services’
HB2003 Funding for Adults
with Serious Mental Illness
04-04 Department of Emergency and
Military Affairs and State
Emergency Council
Performance Audit Division reports issued within the last 12 months
Future Performance Audit Division reports
Department of Environmental Quality—Waste Programs Division
Arizona Department of Transportation—Motor Vehicle Division—State Revenue Collection
Functions