Arizona Medical Board performance audit Auditor General letter report [to] members of the Arizona Legislature ...

              Members of the Arizona Legislature
The Honorable Janet Napolitano, Governor
Mr. Edward J. Schwager, M.D., FAAFP, Chairman
Arizona Medical Board
Mr. Barry A. Cassidy, Ph.D., PA-C, Executive Director
Arizona Medical Board
The Office of the Auditor General has conducted a performance audit of three areas
within the Arizona Medical Board (Board): board authorities delegated to the execu-tive
director; technological and other purchases; and staff turnover. This audit specif-ically
addresses a legislative request approved by the Joint Legislative Audit
Committee on September 25, 2003, and was conducted under the authority vested
in the Auditor General by Arizona Revised Statutes (A.R.S.) §41-1279.03. This audit
was also conducted in accordance with government auditing standards.
Summary
The Auditor General has developed the following information and, where appropri-ate,
recommendations to respond to a legislative request to review three different
areas within the Arizona Medical Board:
  Executive director complaint dismissals—Based on a review of 36 complaints
the executive director dismissed between July 2002 and October 2003, auditors
found that most of these complaints were adequately investigated and reviewed
prior to dismissal. However, auditors question the executive director’s dismissal
of 5 complaints. The authority delegated to the executive director to dismiss
complaints has reduced the Board’s workload through hundreds of complaint
dismissals annually. However, the Board should further enhance the executive
director’s dismissal of complaints by establishing and implementing additional
complaint investigation and review policies.
  Board purchases—The Board purchased over $290,000 in technological hard-ware
and software in fiscal year 2003. Most of the Board’s technology purchas-
Office of the Auditor General
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March 17, 2004
D E B R A K . D A V E N P O R T , C P A
AUDITOR GENERAL
S T A T E O F A R IZ O N A
O F F IC E O F T H E
A U D I T O R G E N E R A L
W IL L IA M TH O M S O N
DEPUTY AUDITOR GENERAL
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es are not particularly excessive. However, one of the purchases was made
without obtaining the required review and approval from the Government
Information Technology Agency (GITA), and some purchases were made with-out
proper cost analysis or documented business justification. Specifically, a
purchase of 11 laptop computers and associated equipment at a cost of near-ly
$33,000 was not submitted for GITA review and approval as required.
Additionally, the purchase of two 42-inch plasma screens and associated equip-ment
costing more than $5,200 each and several 20-inch computer monitors
costing approximately $1,700 each lacked proper cost analysis or documented
business justification. To help ensure that all of its technology purchases are
appropriate and necessary, the Board should annually prepare an internal tech-nology
plan or assessment that identifies its planned technology purchases and
obtain GITA’s review and approval when necessary.
􀁺􇩓 Staff turnover—The Board experienced nearly a 60 percent turnover rate among
its staff in fiscal year 2003. However, this turnover did not result in vacancy sav-ings
because the Board’s personnel expenditures increased by nearly $498,000
in fiscal year 2003. This increase resulted from an increase in employee base
salaries, incentive pay, and Attorney General services, and an increase in annu-al
leave expenditures.
Introduction and background
The Board is a 12-person board that regulates the practice of allopathic medicine in
Arizona through licensure and complaint investigation and resolution. The Board is
composed of eight Arizona licensed physicians and four public members, one of
whom is a registered nurse. The Board employed an executive director and had 50.5
filled staff positions and 7 vacant positions as of January 2004. The Board collected
more than $4.8 million in revenues in fiscal year 2003, over $4.5 million of which came
from licensing fees. At the end of fiscal year 2003, the Board had a fund balance of
approximately $2.6 million.
The Board has several statutory responsibilities related to physician regulation. These
include:
􀁺􇩌 Licensing physicians—The Board is responsible for licensing physicians who
meet the statutory criteria for licensure. Among other things, potential licensees
must graduate from an approved medical school, complete an internship, and
not have a revoked license in another state. According to the Board, more than
16,500 physicians were licensed in Arizona as of December 2003.
􀁺􇩉 Investigating complaints against a physician—Statute requires that the Board
determine through an investigation whether a doctor has engaged in unprofes-sional
conduct or may be medically incompetent.
State of Arizona
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􀁺􇩄 Disciplining and rehabilitating physicians—If the Board
finds that a physician has engaged in unprofessional con-duct
or is medically incompetent, it has several options
available. Options the Board can pursue include placing a
physician on probation, requiring rehabilitation, or sus-pending
or revoking a physician’s license. Additionally, the
Board may issue a nondisciplinary advisory letter when
there is insufficient evidence to support disciplinary action
against a physician, but the Board believes that continua-tion
of the activities that led to the investigation may result
in further board action against the licensee; the violation is a
minor or technical violation that is not of sufficient merit to warrant disciplinary
action; or the physician has demonstrated substantial compliance through reha-bilitation
or remediation that has mitigated the need for disciplinary action, but
repetition of the activities that led to the investigation may result in further board
action against the licensee.
The Board also provides information to the public on licensed physicians both over
the telephone and through its Web site. For each licensed physician, the Web site
provides information such as the number of open investigations, the number of dis-ciplinary
and nondisciplinary actions the Board has taken, and the number of mal-practice
cases resulting in payment.
Most complaints adequately investigated and reviewed
prior to dismissal
As authorized by statute, the Board has delegated to its executive director the author-ity
to dismiss complaints that are without merit. To help ensure complaints are han-dled
appropriately, the Board has implemented a process for the investigation,
review, and disposition of complaints. Auditors’ review of 36 complaints dismissed
by the executive director between July 2002 and October 2003 found that most of the
complaints were adequately investigated and reviewed prior to dis-missal.
However, auditors question the executive director’s dis-missal
of 5 complaints. The Board should further enhance the exec-utive
director’s dismissal of complaints by establishing and
implementing additional complaint investigation and review policies.
Executive director has authority to dismiss
complaints—In 1999, the Legislature gave the Arizona Medical
Board the authority to delegate to the executive director the ability to
dismiss complaints that do not involve medical incompetence.
According to a fact sheet prepared by legislative staff, the intent of this
delegated authority was to reduce the Board’s workload. In July 1999, the Board del-egated
this authority and adopted substantive policy statements to describe the
types of complaints the executive director could dismiss, such as complaints involv-ing
small fee disputes.
Office of the Auditor General
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Arizona Medical Board Activity
Fiscal Year 2003
New licenses issued 1,247
Licenses renewed 8,536
Complaints received 1,346
Complaints resolved 1,462
Source: The Arizona Medical Board.
Legislative concerns related to dele-gated
authorities—Misuse of authori-ty
delegated to the executive director
to dismiss complaints, including dis-missal
of serious complaints, com-plaints
containing multiple violations
of statute, and inconsistent investiga-tions.
In 2001, the Legislature broadened the statute to allow the Board to delegate to its
executive director the ability to dismiss all complaints that are without merit. This
change expanded the delegated authority to quality-of-care complaints, including
medical malpractice complaints. Subsequently, in February
2002, the Board adopted an administrative rule to define the
executive director’s delegated authority. According to R4-16-
407, “The executive director, with the concurrence of the inves-tigative
staff, shall dismiss a complaint if the review shows the
complaint is without merit and dismissal is appropriate.” In
practice, according to the Board, this means that, for quality-of-care
complaints, if the Board’s medical director recommends
that a complaint be dismissed, regardless of whether other
medical consultants or investigative staff have determined that
the evidence supports the allegations, the executive director
can dismiss the complaint. As such, the Board does not expect
the executive director to forward complaints to the Board for a
decision when all or the majority of investigative staff do not
agree on the dismissal. Rather, the Board has delegated to the
executive director the exact same authority it has to dismiss
complaints.
As illustrated in Figure 1 (see page 5), the Board has adopted
a process for the investigation and review of all complaints. Steps in this process
include interviews with complainants and witnesses, review of medical records, and
if necessary, an investigative interview with the licensed physician. Additionally, the
process provides for multiple reviews, including review by a medical consultant, the
medical director, and the quality assurance division chief.
The Board’s executive director first dismissed complaints in April 2001. According to
board data, the Board annually receives an average of 1,248 complaints. The exec-utive
director dismissed 979 complaints during fiscal year 2002 and 712 complaints
during fiscal year 2003. Ninety-two percent of the total complaints the executive
director dismissed in fiscal years 2002 and 2003 were quality-of-care complaints.
Should a complainant disagree with the executive director’s dismissal of a complaint,
statute provides a mechanism to appeal this action to the Board.1 In the letter notify-ing
the complainant of the decision to dismiss the complaint, the complainant is
advised of the right to appeal the executive director’s action and provided a com-plainant
appeal form. According to board staff, from July 1, 2002, through February
13, 2004, 142 appeals of complaints dismissed by the executive director have been
filed with the Board. The Board has upheld 132 of these appeals, referred 4 com-plaints
for further investigation, and overturned one executive director dismissal,
which resulted in an advisory letter being issued to the physician. The Board is
scheduled to hear five appeals at its April 2004 meeting.
1 According to a board official, executive director dismissal of malpractice complaints cannot be appealed. While the
review of these complaints is statutorily required, since there is no complainant, there is no aggrieved party to appeal the
executive director’s action.
State of Arizona
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Types of Complaints
Quality of care—Complaints involving allegations in
which the physician has failed to meet the accepted
standard of care. For example, a quality-of-care com-plaint
could allege medical misdiagnosis, inappropri-ate
prescribing, and/or medical malpractice.
Professional conduct—Complaints involving allega-tions
that do not involve quality-of-care issues, such
as substance abuse, fraud, or inappropriate sexual
conduct.
Source: Auditor General staff summary of information provided by the Arizona
Medical Board and the Federation of State Medical Boards.
Office of the Auditor General
page 5
Quality of Care Professional Conduct
1. Physician's assistant reviews the complaint, writes the
allegation(s), and assigns a medical consultant who has
primary responsibility for complaint investigation.
2. Investigative aide opens investigation, contacts
complainant to confirm allegations, notifies doctor(s)
named in complaint, and obtains medical records.
3. Medical consultant(s) reviews complaint evidence, may
recommend an investigative interview, and prepares an
investigation report indicating whether allegations are
supported. Senior investigator may be assigned to assist
medical consultant as needed.
4. Medical director reviews consultant's report and medical
evidence, and agrees or disagrees with conclusions. Medical
director can either recommend further investigation,
forwarding the complaint to the Staff Investigational Review
Committee (SIRC) for review, or an executive director
dismissal.
6. SIRC reviews referred complaints and determines whether
allegations are supported by the evidence and a violation
of statute. SIRC may recommend further investigation,
executive director dismissal, or sending the complaint to
the Board with a recommendation for action.
1. Professional conduct division chief reviews the complaint
and assigns a senior investigator.
2. Senior investigator opens investigation, contacts complainant
to confirm allegations, and notifies doctor(s) named in
complaint.
3. Senior investigator interviews victim/complainant, relevant
witnesses, and physician and prepares an investigation
report indicating whether allegations are supported.
4. Division chief reviews complaint files, including the
investigation report, and can either recommend further
investigation, forwarding the complaint to the Staff
Investigational Review Committee (SIRC) for review, or an
executive director dismissal.
1 The Staff Investigational Review Committee consists of the following board staff: executive director, medical director, quality
assurance division chief, intake officer, and the assistant director of operations.
Figure 1: Summary of Complaint Investigation Process
As of January 2004
Source: Auditor General staff analysis of the Arizona Medical Board's complaint investigation and review process.
Complaint Received
The intake officer reviews the complaint, determines whether it is a quality-of-care issue or a professional
conduct issue, assigns investigation priority based on nature of complaint, and refers the complaint to Quality
of Care or Professional Conduct.
5. Quality Assurance reviews the complaint and
thoroughness of the associated investigation; and will
then refer the complaint for further investigation, forward
the complaint to SIRC for review, or forward it to the
executive director for dismissal.
Figure 1: Summary of Complaint Investigation Process
As of January 2004
Most complaints appropriately dismissed, but some dismissals are
questionable—Auditors reviewed a random sample of 36 complaints, including
10 malpractice complaints, that the executive director dismissed between July 2002
and October 2003 and found that the executive director dismissed most of the com-plaints
after an adequate investigation and review. However, auditors question the
dismissal of five of the complaints. These included two complaints that board staff
did not adequately investigate prior to the executive director dismissing the com-plaint.
Even though the executive director dismissed these complaints upon the rec-ommendation
of the medical director or investigative staff, the dismissal may have
been premature without additional information. In both of these complaints, staff did
not corroborate information obtained via physician statements. Board staff acknowl-edged
to auditors that additional investigative work should have been done prior to
these complaints’ dismissal. For example:
􀁺􇩉 In May 2003, the Board received a complaint that included an allegation that a
doctor refused to release a patient’s medical records despite the patient com-pleting
a signed release. The doctor responded to the Board, stating that she
had only recently received a signed release and provided the medical records.
Based on the physician’s response, the medical consultant and medical direc-tor
recommended dismissing the complaint. The executive director subse-quently
dismissed the complaint in August 2003. According to the investigative
report, “The alleged refusal of release of records was properly rectified and the
records appropriately released.” The complainant appealed the dismissal to the
Board and submitted evidence that as of September 2003, the doctor still had
not released her medical records. In December 2003, board staff verified that
the medical records were never sent, and the Board opened a new complaint
against the doctor.
In three other cases, auditors question the executive director’s dismissal of the com-plaints
because, based on the documentation in the complaint files, it appears as
though evidence, including experts’ opinions, supports the allegations. For two of
these complaints, board staff indicated that the dismissals were appropriate
because the medical director had recommended the complaints be dismissed.
According to board staff, dismissal of these complaints is appropriate because the
medical director’s opinion regarding quality-of-care complaints represents the most
appropriate and up-to-date interpretation of the evidence. Further, board staff
explained that the Board trusts the medical directors’ judgment in weighing all evi-dence
in conjunction with his/her medical background to form an opinion. For exam-ple:
􀁺􇩉 In March 2002, the Board received a notice of settlement for a malpractice case.
The information alleged that, among other things, an anesthesiologist improp-erly
monitored the patient and improperly monitored the patient’s airway during
an in-office cosmetic surgery, which led to the patient’s respiratory arrest and
death. Since the Board did not have an internal medical consultant who spe-cialized
in anesthesiology, it contracted with an anesthesiologist to review the
complaint and determine if the physician met the standard of care.
State of Arizona
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In his opinion to the Board, the outside medical consultant stated that all patients
are entitled to receive the same level of monitoring during anesthesia regard-less
of where they have their surgical procedure performed. He went on to say
that it is generally accepted that during anesthesia, circulation, ventilation, oxy-genation,
and temperature should be monitored. However, he concluded that
although the physician states he was visually monitoring ventilation, the medical
record does not support that the physician adequately monitored ventilation,
and thus failed to meet the standard of care. Additionally, in response to the
physician’s later claims in a letter that he met the standard of care and moni-tored
the ventilation appropriately by using a specific medical device, the out-side
medical consultant said that the device cannot be used as a proxy for ven-tilatory
monitoring. He also reiterated that the medical record does not indicate
that the standard of care for monitoring ventilation was met.
After subsequently conducting an investigative interview with the physician, the
Board’s medical director recommended that the executive director dismiss the
complaint. Specifically, the medical director stated that during the interview the
physician appeared knowledgeable and sincere and the physician’s contention
that using the specific medical device provided appropriate monitoring is valid.
During the investigative interview, the physician had stated to the medical direc-tor
that he thought the specific medical device was an appropriate proxy for
monitoring ventilation and that he was also visually monitoring the patient’s ven-tilation.
In January 2003, the executive director dismissed the complaint, indicating that
the allegations were without merit. As mentioned above, regardless of the out-side
medical consultant’s opinion, according to board staff, dismissal of this
complaint was appropriate because the medical director said it should be dis-missed.
Regarding whether the physician was visually monitoring the patient’s
ventilation, according to the Board’s legal counsel, if under oath a physician
states that he/she did something and appears credible and knowledgeable, the
Board and Board staff can choose to operate under the assumption that the
physician did it, whether or not the medical record supports the assertion.
In the remaining case, it appears that not all of the complainant's five allegations were
appropriately resolved by the dismissal. Evidence gathered during the investigation
appears to support the allegation that the physician failed to maintain adequate med-ical
records. Records reviewed included two sheets of paper that represented the
complete medical chart, but did not contain such things as the patient’s blood pres-sure,
weight, height, and pulse. Further, the doctor, in his response to the complaint
allegations, admitted to the Board that he should have documented all the testing he
performed on the patient. Moreover, the Board raised concerns about the physician’s
medical documentation when it heard this complaint, and subsequently referred the
complaint for additional investigation. The Board’s executive director indicated to
auditors that the complaint as a whole lacked merit because the complainant was
trying to blackmail the doctor. He further explained that he consulted with the Board’s
Assistant Attorney General on all issues related to the case. However, while the com-
Office of the Auditor General
page 7
plaint documentation illustrated involvement of an Assistant Attorney General regard-ing
one of the complaint allegations, there is no documentation in the complaint file
to support that the Assistant Attorney General indicated there was insufficient evi-dence
to support further board action regarding the allegation in question. Further,
when auditors contacted this Assistant Attorney General, he informed the auditors
that he had no involvement with the allegation in question.
Improvements should further enhance executive director’s dismissal
of complaints—The Board should direct its staff to:
􀁺􇩔 Thoroughly conduct and document its complaint investigations—In June 2003,
the Board established its current complaint investigation and review process.
The process outlines the steps that board staff should follow when conducting
an investigation, including required reviews by designated staff. However, while
the Board has some complaint investigation policies, its process is not fully sup-ported
by needed policies. Specifically, the Board has not established policies
regarding when to follow up with complainants and appropriate witnesses and
when to corroborate information received from physicians. Additionally, the
Board has not established policies to help ensure that complaint investigations
and recommendations are fully supported and documented. Therefore, to help
ensure even more consistent and thorough investigations, the Board should
develop and implement additional policies to support its current investigation
process, including policies for following up with complainants and witnesses,
corroborating information received from physicians, and fully documenting
investigation analyses and recommendations. Once developed, the Board
should also train its investigative staff regarding these policies.
􀁺􇩅 Establish policies to guide decision-making—Similarly, the Board should estab-lish
and implement policies to guide decision-making during the complaint
review process. Currently, although quality-of-care complaints may be reviewed
by a medical consultant(s), the medical director, the executive director, and, in
some instances, the Staff Investigative Review Committee, there are no written
policies directing some of these reviews. As a result, the Board should establish
additional policies that detail the factors that complaint investigation reviewers
should consider when deciding whether a complaint should be recommended
for dismissal or forwarded to the Board. Factors to be considered should include
such things as whether all allegations are addressed, the adequacy of the evi-dence,
and whether the evidence supports that statutory violations may have
occurred. The policy should also outline the process to be followed in arriving at
the final recommendation. For example, the policy should define how any dif-fering
conclusions among reviewers should be addressed.
By implementing these additional policies, the Board will institute additional safe-guards
within its complaint investigation and review process that will further enhance
the executive director’s dismissal of complaints.
State of Arizona
page 8
Board should better document need for all technological
purchases
The Board purchased over $290,000 in technological hardware and software during
fiscal year 2003. Most of the Board’s technology purchases are not particularly
excessive, but one purchase lacked required review and approval by the
Governmental Information Technology Agency (GITA), and some purchases lacked
proper cost analysis or documented business justification. Additionally, auditors’
review of other questioned purchases identified no problems.
Most technological purchases not excessive, but need for purchas-es
not documented—With legislative authorization to spend over $197,000 on
technology in fiscal year 2003, the Board has acquired a variety of both computer
hardware and software.1 Based on auditor review, most of the Board’s technology
purchases are not particularly excessive and many of its information technology-related
practices are consistent with those in other organizations. However,
one of the Board’s purchases was not approved by GITA as required. In
December 2000, GITA approved a $282,000 project investment justification
(PIJ) to replace some of the Board’s aging technological equipment during
fiscal years 2002 and 2003, including computers, printers, and file servers.
The Board completed its purchase of this equipment approved in the PIJ in
September 2002. However, in March 2003, the Board purchased 11 laptop
computers and associated equipment that cost nearly $33,000 and did not
seek GITA’s approval even though this purchase exceeded the $25,000
statutory threshold required for submitting projects to GITA for review and
approval. Additionally, at the request of auditors, GITA staff reviewed the Board’s
technological purchases for fiscal years 2002 and 2003 and concluded that the
Board purchased technology at a cost exceeding $25,000 without GITA approval.
According to the Board’s executive director, the Board did not submit a new PIJ or
amendment to its PIJ approved in December 2000 because it assumed the addi-tional
purchase was covered by the December 2000 PIJ.
Additionally, some of the Board’s technology purchases lacked proper cost analysis
or documented business justification. According to management guidelines from the
Information Systems Audit and Control Association’s Control Objectives for
Information and related Technologies, several critical success factors should be con-sidered
to properly manage an organization’s technology investment.2 These
include defining the formal investment criteria for decision making, and defining an
investment decision-making process that considers, among other things, short- and
long-term impacts, business justification, and the strategic contribution such invest-ments
make to the organization. The Board did not appear to develop such criteria
Office of the Auditor General
page 9
Legislative concerns regarding
board purchases—Purchases of
unnecessary and questionable
technological equipment, as well
as the purchase of chinaware and a
dishwasher for board members.
1 For fiscal year 2003, the Board received legislative authorization to spend $197,000 on technology. This included specif-ic
authorization for computer hardware purchases, such as personal computers, printers, and servers; software pur-chases;
and Web site management and maintenance.
2 Information Systems Audit and Control Association, IT Governance Institute, Management Guidelines, COBIT, 3rd Edition,
July 2000.
or perform proper cost analyses when it purchased some of its equipment. For
example, the Board purchased two 42-inch plasma screens with associated equip-ment
costing more than $5,200 each without performing a proper cost analysis.
Additionally, although purchased under the December 2000 PIJ, the Board’s pur-chase
of ten 20-inch flat panel monitors, costing approximately $1,700 each, lacked
proper business justification either in the PIJ or other documented assessment.
To help ensure that all of its technology purchases are appropriate and necessary,
the Board should annually prepare an internal technology plan or assessment, using
an investment decision-making process that identifies its planned technology pur-chases.
While the Board annually prepares and submits an annual information tech-nology
plan to GITA, this plan and decisions to make technology purchases should
be supported by a documented investment decision-making process and assess-ment.
Additionally, the Board should also submit PIJs to GITA for its review and
approval when necessary.
No problems identified with other questioned purchases—Auditors also
reviewed the purchase of a dishwasher, dinnerware, and silverware, which were
made in fiscal year 2003. According to auditor review of purchase receipts and
claims, the executive director purchased the dishwasher at a cost of $199 and did
not seek reimbursement from the Board. The dinnerware, costing $88, and silver-ware,
costing $30, were purchased with board monies. Since these items cost less
than $1,000, state procurement requirements did not apply. According to the Board’s
executive director, these items were purchased for the Board’s use during board
meetings.
High staff turnover, but no vacancy savings due to
increased costs
While the Board has experienced significant turnover, this turnover has not yielded
vacancy savings. Specifically, the Board experienced nearly a 60 percent turnover
rate in fiscal year 2003 and a 22 percent turnover rate for the first 6 months of fiscal
year 2004. However, this turnover has not resulted in vacancy savings due to an
increase in personnel expenditures. Additionally, auditors found that executive assis-tant
salaries are consistent with Department of Administration (DOA) salary specifi-cations.
High staff turnover has not resulted in vacancy savings—As illustrated
in Table 1 (see page 12), for fiscal year 2003, the Board experienced nearly a 60 per-cent
turnover rate and for the first 6 months of fiscal year 2004, the Board experi-enced
a 22 percent turnover rate. Specifically, from July 8, 2002, through December
31, 2003, a total of 48 employees terminated their employment with the Board.
During this time, the Board was authorized 58.5 staff positions. Additionally, employ-ee
turnover has varied among the Board’s different departments and positions. For
State of Arizona
page 10
example, in fiscal year 2003, information technology positions experi-enced
a greater than 100 percent turnover rate, the enforcement division
experienced a 30 percent turnover rate, and one executive assistant posi-tion
was filled three different times.
Employee turnover at the Board has consisted of both covered and
uncovered employees. Covered employees work under the State Service
Merit System, which is governed by administrative rules that must be fol-lowed
regarding employment, classification and compensation, conduct,
grievances, discipline, and separations. Uncovered employees work at
the pleasure of the Board’s executive director. In 1998, the Board began
to transition its covered staff positions to uncovered status because the responsibil-ities
and reporting relationships of these positions met the statutory criteria for des-ignation
as uncovered positions. During the period reviewed, the Board’s two
remaining covered employees were terminated, and now all of the Board’s positions
are uncovered. Additionally, some employees voluntarily left their positions with the
Board, while others were terminated. Specifically, of the 48 employees who left the
Board, 13 were terminated and 35 left voluntarily.
Consistent with the Arizona Agency Handbook and on the advice of the Attorney
General’s Office, the Board did not disclose specific reasons for termination of the
uncovered employees. Further, based on auditor review of terminated employees’
personnel files, the Board did not document the performance of these employees.
However, according to the Board’s executive director, the Board plans to implement
an employee performance evaluation system by the end of 2004. For its two covered
employees, the Board documented these employees’ per-formance
and specific reasons for termination as required
by state personnel rules.
Staff turnover has affected board operations. According to
the Board’s executive director, new processes and a new
vision have been put in place at the Board, which led to
some people leaving. However, high employee turnover in
key investigation and medical consultant positions has
had a negative effect on the quality and timeliness of the
complaint investigations. According to board records, for
the 36 complaints reviewed by auditors that the executive
director dismissed between July 2002 and October 2003,
complaint investigations ranged from 18 to 880 days to
complete, with some cases being assigned to multiple
investigators. For example, a case that opened in May 2001
was handled by three different investigators between March 2003 and September
2003. In addition, according to the Board’s executive director, it takes approximately
6 months for a new investigator or medical consultant to become fully trained in the
complaint investigation and review process.
Office of the Auditor General
page 11
Legislative concerns regarding
staff turnover and vacancy sav-ings—
50 to 70 percent turnover
in critical investigator and staff
positions, use of vacancy sav-ings,
and whether administrative
assistants are working at higher
grade levels than senior inves-tigative
staff.
Table 1: Quarterly Employee Turnover Rates
July 8, 2002 through December 31, 2003
Rates
Period FY 2003 FY 2004
1st quarter 13.68% 18.80%
2nd quarter 17.09 3.42
3rd quarter 15.38 --
4th quarter 13.68 --
Note: The fiscal year 2003 turnover rate was 59.83 percent
Source: Auditor General staff analysis of Arizona Medical Board
personnel files.
Because of a variety of circumstances, this turnover has not yielded vacancy savings.
Specifically, in fiscal year 2003, the Board’s personnel expenditures increased by
nearly $498,000. Some reasons for this increase include the Board increasing base
salaries by 5 percent at the end of fiscal year 2002; reclassifying some positions at
higher salaries and promoting some of its staff; employee incentive pay; an increase
in the amount of annual leave paid; and payment for Attorney General legal and other
professional services. The Board also was able to fill 17 vacant positions within 2
weeks of the vacancies. Finally, auditors identified that a board member erroneously
received a $6,000 payment in board funds in July 2002. Board staff had not previ-ously
detected the erroneous payment because staff did not verify the accuracy of
its payroll and review this payment prior to its disbursement. Additionally, at the
request of auditors, Department of Administration staff reviewed the payment, but
could not determine how it occurred. However, the Board is currently attempting to
recover these monies and has implemented procedures to review and ensure the
accuracy of its payroll payments.
Executive assistants paid according to DOA salary specifications—
Finally, as illustrated in Table 2, while auditors found that executive assistants are paid
at a higher level than senior medical investigators and investigators, their salaries are
consistent with DOA’s salary specifications. For example, executive assistants start
at $32,522, while senior medical investigators’
starting salary is $29,296. Executive assistants
provide administrative support to the Board’s
administrative team, including the executive and
assistant directors; and administrative assistants
respond to public information requests, prepare
files for public review, and prepare for board
meetings. Typically, senior medical investigators
assist medical consultants with quality-of-care
complaints and conduct professional conduct
complaint investigations, while investigators pro-vide
investigative assistance by contacting com-plainants,
preparing initial complaint files, and
conducting some investigation research.
Medical consultants conduct quality-of-care
complaint investigations and make recommen-dations
regarding the appropriate disposition of
these complaints.
Based on a review of the Department of
Administration’s Alphabetical List of Job
Classifications, the pay grade levels of these board positions are comparable to sim-ilar
positions at other state agencies.
State of Arizona
page 12
Table 2: Pay Grade and Salary Levels
As of January 2004
Number of
Positions
Pay
Grade
Salary
Levels
Medical consultants 7 sr1 $66,450 — $181,450
Executive assistants 3 20 32,522 — 40,000
Senior medical investigators 8 19 29,296 — 50,471
Investigators 3 17 25,070 — 43,557
Administrative assistants 1 15 21,728 — 37,239
1 Special rates are established for job classes when their ranges do not fit the regular salary
grades, or for job classes paid on an hourly, daily, or per-performance basis.
Source: Auditor General staff summary of classification action requests prepared by the Board and
approved by the Department of Administration (DOA) between April 1999 and November
2003; the DOA Arizona State Service Salary Schedule, effective June 8, 2002; and the
DOA Arizona State Special Rate Salary Schedule, effective December 29, 2003..
Recommendations
1. To further enhance the executive director’s dismissal of complaints, the Board
should:
a. Establish and implement additional policies to guide board staff on prop-erly
conducting, completing, and documenting complaint investigations,
including policies for following up with complainants and witnesses, cor-roborating
information received from physicians, and fully documenting
complaint investigation analysis and recommendations. Once developed,
the Board should also train its investigative staff regarding these policies.
b. Establish and implement additional policies to guide decision-making dur-ing
the complaint review process. Policies should reflect the factors that
reviewers should consider when deciding whether a complaint should be
referred for further investigation, dismissed, or forwarded to the Board,
including whether all allegations are addressed, the adequacy of the evi-dence,
and whether the evidence supports that statutory violations may
have occurred. Policies should also outline the process the reviewers
should follow in arriving at the final decision, including how differing con-clusions
among reviewers should be addressed.
2. The Board should annually prepare an internal technology plan, using an
investment decision-making process, that identifies its planned technology pur-chases.
3. As required by statute, the Board should ensure that it submits project invest-ment
justifications to the Government Information Technology Agency to obtain
review and approval for qualifying technology purchases.
We have discussed the results of this review with the Arizona Medical Board, and
their response is enclosed. My staff and I will be pleased to discuss or clarify items
in this letter.
Sincerely,
Debbie Davenport
Auditor General
Office of the Auditor General
page 13
Office of the Auditor General
AGENCY RESPONSE