Performance audit, Department of Health Services, sunset factors

              State of Arizona
Office
of the
Auditor General
PERFORMANCE AUDIT
Report to the Arizona Legislature
By Debra K. Davenport
Acting Auditor General
September 1999
Report No. 99-19
DEPARTMENT
OF
HEALTH SERVICES
SUNSET FACTORS
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee
composed of five senators and five representatives. His mission is to provide independent and impar-tial
information and specific recommendations to improve the operations of state and local government
entities. To this end, he provides financial audits and accounting services to the state and political
subdivisions and performance audits of state agencies and the programs they administer.
The Joint Legislative Audit Committee
Senator Tom Smith, Chairman
Representative Roberta Voss, Vice-Chairman
Senator Keith Bee Representative Robert Burns
Senator Herb Guenther Representative Ken Cheuvront
Senator Darden Hamilton Representative Andy Nichols
Senator Pete Rios Representative Barry Wong
Senator Brenda Burns Representative Jeff Groscost
(ex-officio) (ex-officio)
Audit Staff
Shan Hays—Manager
and Contact Person (602) 553-0333
Lisa Eddy—Audit Senior
Mark Haldane—Staff
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410
Phoenix, AZ 85018
(602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
ACTING AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
September 22, 1999
Members of the Legislature
The Honorable Jane Dee Hull, Governor
Dr. James Allen, Director
Department of Health Services
Transmitted herewith is a report of the Auditor General, the Department of Health
Services’ Sunset Factors. This report was prepared as part of the Sunset review set forth
in A.R.S. §§41-2951 through 41-2957 and addresses the 12 statutory Sunset Factors for
the Department of Health Services.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on September 23, 1999.
Sincerely,
Debbie Davenport
Acting Auditor General
Enclosure
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TABLE OF CONTENTS
Page
Introduction and Background......................... 1
Sunset Factors ................................................. 5
Agency Response
ii
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OFFICE OF THE AUDITOR GENERAL
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has prepared agency-wide
sunset factors for the Department of Health Services (Depart-ment).
These sunset factors were prepared as part of the sunset
review set forth in Arizona Revised Statutes (A.R.S.) §§41-2951
through 41-2957. Sunset factors for the Department’s Division
of Behavioral Health Services were addressed in a separate re-port
(Auditor General Report No. 99-12). Those factors accom-pany
a series of five performance audit reports issued previ-ously
on the Department in 1998 and 1999. (See Scope and
Methodology, page 3).
Organization of the Department
The Department is divided into five divisions, with several bu-reaus,
offices, and programs within each division:
n The Division of Behavioral Health Services—(1,001.9
FTE) provides publicly funded behavioral health services
through four major programs: services to adults with seri-ous
mental illness, services to adults with substance abuse
problems or general mental health disorders, services to
children in need of behavioral health treatment, and opera-tion
of the Arizona State Hospital. The Arizona State Hos-pital
(ASH) is organized as a component of the Division of
Behavioral Health Services. ASH is the only state-funded
psychiatric hospital in Arizona.
n The Division of Public Health Services—(569.6 FTE) in-cludes
the bureaus of Community and Family Health Serv-ices,
Emergency Medical Services, Epidemiology and Dis-ease
Control Services, Health Systems Development, Public
Health Statistics, and State Laboratory Services. It also con-tains
the offices of Border Health, Local and Minority
Health, the Tobacco Education and Prevention Program,
and Vital Records.
Introduction and Background
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OFFICE OF THE AUDITOR GENERAL
The Division administers numerous programs such as im-munizations,
the prevention and control of injuries and dis-abilities,
diabetes, stroke, asthma, and tobacco use. Addi-tionally,
it administers programs for older adult health,
HIV/STD services, and infectious disease services and envi-ronmental
health, as well as several other programs. It also
certifies emergency medical technicians and regulates am-bulance
service. Furthermore, the Division contains regis-tries
for cancer, birth defects, and hospital discharges, and
also conducts monthly behavioral health risk factor tele-phone
surveys.
n The Division of Assurance and Licensure Services—
(199.6 FTE) provides information, establishes standards, and
licenses and regulates health and childcare facilities. It also is-sues
licenses for childcare facilities, behavioral health facili-ties,
and group homes for the developmentally disabled. It
certifies childcare group homes and is responsible for health
and safety inspections for foster homes. Additionally, it ex-amines
and licenses individuals fitting and dispensing
hearing aids or engaging in the practice of audiology or
speech-language pathology. Further, it monitors alcohol
and other drug screening, education, or treatment programs
and facilities. Finally, it adopts and enforces standards for
approval of domestic violence offender treatment programs.
n The Division of Information Technology Services—
(129.4 FTE) provides technical support to the various
divisions, bureaus, and offices within the Department. It
integrates information technology planning with agency
business objectives and the State’s information technology
goals.
n The Division of Business and Financial Services—(78.0
FTE) works to ensure that the Department is compliant with
the state procurement code and public finance laws. It pre-pares
all the Department’s financial statements and reports
required by the state or federal governments. It also main-tains
financial internal controls over agency revenues, ex-penditures,
payrolls, assets, and liabilities as required by
agency, state, or federal requirements.
Introduction and Background
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Scope and Methodology
The Department’s performance was analyzed in accordance
with the 12 statutory sunset factors. Previous audit work at the
Division of Assurance and Licensure Services (Auditor General
Report No. 98-17), the Bureau of Emergency Medical Services
(Auditor General Report No. 99-6), the Arizona State Hospital
(Auditor General Report No. 99-9), the Tobacco Education and
Prevention Program (Auditor General Report No. 99-17), and
the Bureau of Epidemiology and Disease Control Services
(Auditor General Report No. 99-18) provided a basis for the
responses to the Sunset Factors. Also included is information
obtained through interviews with staff from the Governor’s
Regulatory Review Council and the Office of the Attorney Gen-eral.
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SUNSET FACTORS
In accordance with Arizona Revised Statutes (A.R.S.) §41-2954,
the Legislature should consider the following 12 factors in de-termining
whether the Arizona Department of Health Services
should be continued or terminated. Sunset factors for the De-partment’s
Division of Behavioral Health Services were ad-dressed
in a separate report (Auditor General Report No. 99-
12).
1. The objective and purpose in establishing the Depart-ment.
The Department of Health Services (the Department) was
established pursuant to Laws 1973, Chapter 158 (A.R.S. §36-
102, et seq.), by consolidating several programs and agen-cies
into a single department with a variety of responsibili-ties.
The Department succeeded to the duties and responsi-bilities
of the State Department of Health, Arizona Health
Planning Authority, Crippled Children Services, Arizona
State Hospital, Arizona State Hospital for Disabled Miners,
Arizona Pioneers’ Home, and the Anatomy Board. Ac-cording
to the Department’s enabling act, the Legislature
intended that the Department would provide or promote
the following seven activities:
“ . . . 1. Quality health care, in coordination with the pri-vate
sector of health providers, to the citizens of this state.
2. Cost control mechanisms that will insure that the costs
of health care to the citizens of this state are justified and
equitable. 3. Control of the quantity and quality of health
care facilities within the state. 4. Necessary health services
for medically dependent citizens of this state. 5. Essential
health care services, including but not limited to, emer-gency
medicine, preventive medicine, mental, maternal
and medical rehabilitation. 6. Comprehensive and con-tinuing
planning, including assessment, identification and
publication of health needs in this state. 7. Compliance
with standards in licensing of health facilities.”
The purpose of the act was to provide an integration of
health services to the people of Arizona in a pattern that
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
would reduce duplication of administrative efforts, services,
and expenditures through planning and coordination.
2. The effectiveness with which the Department has met
its objective and purpose and the efficiency with which
it has operated.
The Department has met its overall objective and purpose.
However, in a series of six reports, the Auditor General has
identified numerous ways the Department of Health Serv-ices
could improve its efficiency and effectiveness.
n The audit of the Division of Assurance and Licensure
Services (ALS), Auditor General Report No. 98-17, found
that ALS could increase its effectiveness through the use
of a stronger enforcement policy for supervisory and
adult care homes and childcare facilities. The Division
has not taken sufficient enforcement action to prevent
repeated noncompliance and to ensure that facilities cor-rected
serious deficiencies. Some facilities have been
chronically out of compliance with rules and regula-tions,
but ALS has not taken enforcement action. This
problem has persisted since it was first reported in the
Auditor General’s 1988 performance audit of the Divi-sion
(Auditor General Report No. 88-12).
n The Bureau of Emergency Medical Services (EMS) audit,
Auditor General Report No. 99-6, reported that EMS
could improve its system for investigating and resolving
complaints against emergency medical technicians,
paramedics, ambulance companies, and related entities.
Since August 1998, the Bureau has taken steps to ensure
final resolution decisions are made in a more timely
manner. However, the Bureau continues to have sys-tematic
problems in how it handles informal and formal
complaints, including a lack of appropriate staff train-ing,
long delays, inadequate file tracking, and an inap-propriate
computer tracking system. That report also
found that Arizona’s Certificate of Necessity (CON)
system provides more regulation than is necessary for
overseeing ambulance service. The CON system guar-antees
neither coverage throughout the State nor quality
assurance, and further, limits competition in the provi-
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
sion of ambulance service. Additionally, the current
system may prevent the introduction of service im-provements
that would better meet a community’s
needs.
n The performance audit of the Arizona State Hospital
(ASH), Auditor General Report No. 99-9, concluded that
ASH has difficulty providing adequate staff to care for its
patients, since the hospital suffers from high vacancy and
turnover levels. The effects of staffing shortages are com-pounded
by ASH’s method used to allocate staff among
the patient units, which does not always allocate suffi-cient
staff levels to the patient treatment units. These
staffing problems contributed to the Federal Health Care
Financing Administration’s decision to deny ASH’s 1998
application to participate in the Medicare reimbursement
program, a step that eliminates federal, state, and local
reimbursements for both Medicare and AHCCCS/Title
XIX patients. Additionally, the report found that ASH’s
facilities are inadequate and it lacks long-term plans to
guide its future. ASH facilities are deteriorating, over-crowded,
and do not provide an appropriate therapeutic
environment for the hospital’s patients. ASH has not ade-quately
planned for the future and has only recently initi-ated
a planning effort that may contribute to policymak-ers’
future facility decisions.
n The audit of the Tobacco Education and Prevention Pro-gram
(TEPP), Auditor General Report No. 99-__, stated
that TEPP should develop an evaluation strategy, in-cluding
an evaluation plan, to correspond with TEPP
goals, improve communication with local projects, and
attempt to obtain tobacco-related information from other
state entities. Additionally, the report recommends that
TEPP conduct strategic planning and establish policies
and procedures for statewide and local projects. Finally,
TEPP has not adequately defined or monitored its local
projects’ administrative costs, and, therefore, has no as-surance
that administrative costs are within the estab-lished
limit of 10 percent.
n The audit of the Bureau of Epidemiology and Disease
Control Services (Auditor General Report No. 99-18),
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
recommended that the Bureau develop a system to en-sure
the completeness and timeliness of disease report-ing,
more frequently disseminate disease surveillance in-formation
to a broader base of constituents, and address
deficiencies in its information technology systems. It also
found that the scope of activities for the Office of Envi-ronmental
Health should be reviewed and the Office
should determine, and propose to the Legislature, what
the appropriate set of activities should be. The report
further recommends that the Arizona Immunization
Program Office correct design flaws in the Arizona State
Immunization Information System and enforce its re-porting
requirements, verify school immunization data
reports from selected schools, and coordinate with the
Arizona Department of Education to promote immuni-zation
objectives.
Audit work also revealed that the Department has inade-quate
information technology support for many of its func-tions.
Specifically,
n The Division of Information Technology Services has
been unable to provide the Bureau of Epidemiology and
Disease Control with system improvements, such as re-port
format programming within the Tuberculosis In-formation
Management System, or maintenance of ex-isting
services, such as the Internet Web site.
n Programming changes at the Division of Behavioral
Health Services have sometimes taken over two years to
make.
n The Division of Assurance and Licensure Services suf-fers
from a complaint database that lacks sufficient con-trols
to ensure accurate and consistent data entry and
fails to provide adequate information.
n The complaint tracking system at the Bureau of Emer-gency
Medical Services was developed for use in an-other
Department Division and has not been modified to
fit the Bureau’s requirements.
n The Arizona State Hospital reported having no Local
Area Network (LAN) or voice mail, limited electronic
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
mail, and no coordination or sharing of information
between various departments and systems.
In December 1998, 40 of 120 funded positions were vacant
within the Division of Information Technology Services. The
inability to recruit and retain qualified programmers has
hampered the division’s ability to meet the Department’s
technology needs.
3. The extent to which the agency has operated within the
public interest.
The Department of Health Services has generally operated
in the public interest by developing, coordinating, moni-toring,
and providing health care and health-related activi-ties.
For example, the Department was the lead public
health agency in identifying the source of hantavirus, a vi-rus
carried by rodents that causes a variety of illnesses in
humans, including severe respiratory infections and, in
some cases, hemorrhaging, kidney disease, and death. In
addition, the Department was a national leader in elimi-nating
lead-based paint from playground equipment and
mini-blinds. Moreover, its “Tumor-causing, teeth-staining,
smelly, puking habit” anti-smoking campaign received na-tional
acclaim.
Some other examples of how the Department has operated
in the public interest include:
n The Department licenses and regulates approximately
2,000 childcare facilities, approximately 1,035 residential
facilities, and about 25 adult daycare programs. In addi-tion,
it regulates approximately 170 skilled nursing fa-cilities
and 11 intermediate care facilities for the mentally
retarded. Approximately 815 agencies, representing
more than 1,450 behavioral health programs, are subject
to the Department’s regulation. Furthermore, approxi-mately
1,310 health care providers, such as hospitals,
outpatient treatment centers, hospices, and home health
agencies, are also regulated by the Department. Finally,
the Department certifies emergency medical technicians
and regulates ambulance service.
Sunset Factors
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n The Department provides education, assistance, and
programs to promote the public health, safety, and wel-fare.
It provides programs for the prevention and control
of communicable diseases, environmentally provoked
diseases, and vaccine-preventable diseases, as well as
the prevention and reduction of tobacco use through
public health education. The Department promotes a to-bacco-
free Arizona through establishment and operation
of community programs, education, and enforcement. It
also provides administrative support to several advisory
committees and provides assistance and advice to
county health departments and health care providers.
n The Department provides service to individuals in need
of inpatient psychiatric services. The Arizona State Hos-pital
(ASH) is the only state-operated psychiatric hospi-tal
in Arizona. ASH serves civil patients under court or-ders
to receive treatment at the hospital because they
pose a threat to themselves or others; and forensic pa-tients,
who have been ordered to ASH by the criminal
courts. Community behavioral health services are pro-vided
under the Division of Behavioral Health Services,
which is discussed in a separate report (Auditor General
Report No. 99-12).
Audits of the Department identified ways it can better pro-tect
the public’s interest. These activities include (1) using all
available enforcement authority against supervisory and
adult care homes and child care facilities that fail to meet
minimum licensure standards, thus threatening the health,
safety, and welfare of those in their care (Auditor General
Report No. 98-17); (2) implementing a pool of nursing staff,
filling vacancies, and taking steps to reduce turnover in or-der
to provide appropriate levels of treatment and safety at
ASH (Auditor General Report No. 99-9); and (3) reevaluat-ing
the certificate of necessity system for regulating ambu-lance
service, which limits competition and fails to either
ensure coverage throughout the State or provide quality as-surance
(Auditor General Report No. 99-6.)
According to Department officials, it is taking action in these
areas. For example, a system is being instituted to track
adult care and other facilities regulated by the Division of
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
Assurance and Licensure Services and/or providers with a
history of noncompliance. Additionally, the Department has
sought legislation that could improve the enforcement pro-cess.
At ASH, nursing positions with competitive hourly
rates have been created and several vacancies have been
filled. A Medical Recruiter position has been created and a
standardized exit interview instrument has been developed
to address recruiting and turnover issues at the State Hos-pital.
Further, the Department has agreed to implement,
pending approval from the Governor and/or Legislature,
the recommendations of the Auditor General pertaining to
the Bureau of Emergency Medical Services certificate of ne-cessity
system.
4. The extent to which rules and regulations promulgated
by the agency are consistent with legislative mandate.
According to the Governor’s Regulatory Review Council
and the Attorney General’s representative assigned to the
Department, the rules promulgated by the Department are
consistent with its legislative mandate. Three divisions
within the Department (Assurance and Licensure Services,
Public Health Services, and Behavioral Health Services),
write and revise rules.
However, the Department has not promulgated rules as re-quired
by statute for the Arizona State Hospital, as required
by A.R.S. §36-201, according to Department officials.
According to agency officials, the Department’s ability to
promulgate rules has been significantly impacted by A.R.S.
§41-1056. That law provides that if a five-year review report
is not submitted to the Governor’s Regulatory Review
Council (GRRC) by an established due date, the rules sub-ject
to review automatically expire. The Department is re-quired
to submit an average of 9 five-year review reports
each calendar year. Additionally, the Department is re-quired
to submit progress reports to GRRC, updating it on
the status of commitments contained in the five-year review
reports. In addition to the standard rulemaking process, the
Department must also periodically issue exempt rules as de-fined
by A.R.S. §41-1005, which are not subject to the regu-lar
review process, such as the Assisted Living rules prom-
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
ulgated last year and the Abortion Clinic rules due by De-cember
1999. Finally, the Department tracks the status of its
rules through a cumbersome manual tracking system.
The Department is in the process of promulgating several
rules:
n Licensing and regulating health and safety at group homes
for persons with developmental disabilities, as required by
A.R.S. §36-132;
n Treatment programs for sexually violent persons, as man-dated
by A.R.S. §§36-3701 and 36-3707; and
n Licensing audiologists and speech language pathologists,
as required by A.R.S. §36-1902, enacted in 1995.
The deadline for public comments on these rules has expired
and they are expected to become effective later in 1999.
Additionally, the Department is seeking an exemption from
the rulemaking process for the approval of domestic violence
offender treatment programs pursuant to A.R.S. §13-3601.01.
Finally, the Department has postponed promulgating rules
related to the collection of license fees from health care facili-ties,
as mandated by A.R.S. §36-405, pending statutory
changes that would clarify that licensure fees are nonrefund-able
and applied to initial licensure and renewal of licensure,
change licensure fees to be based on licensed capacity, change
the definition of “beds” to “licensed capacity,” and exempt
state-operated health care institutions from paying licensure
fees. Such statutory changes were proposed as part of the om-nibus
bill (HB2481) vetoed by the Governor.
5. The extent to which the agency has encouraged input
from the public before promulgating its rules and
regulations and the extent to which it has informed the
public as to its actions and their expected impact on the
public.
When the Department drafts rules, it solicits input from all
affected parties. Rule proposals are sent to associations, and
interested parties and stakeholders, including all local
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
health officials. Meetings are then held with affected per-sons
and surveys are conducted. The proposed rules, in-cluding
a notice of dates and locations of hearings being
held to obtain public comment, are published in the Arizona
Administrative Register. The Department sends a copy of the
notice of proposed rulemaking, including the text of the
rule, to each of the Department’s district liaison offices. Ad-ditionally,
the Division of Assurance and Licensure posts
proposed rules on its Internet Web site.
The Department also provides education about its rules
through meetings with groups and associations. It also
works with associations to disseminate its rulemaking ac-tivities
through association newsletters. Moreover, it notifies
the public of its rulemaking and where to make public
comment through press releases to newspapers. Rulemak-ing
information is also included in the Department news-letter,
Healthlink.
6. The extent to which the agency has been able to inves-tigate
and resolve complaints that are within its jurisdic-tion.
The Department has statutory authority to investigate com-plaints
in a variety of areas and has inconsistently per-formed
this function. The Arizona State Hospital has
adopted a formal grievance process as prescribed in the
Arizona Administrative Code. Although these rules apply
only to persons committed to ASH under A.R.S., Title 36,
ASH has extended a modified grievance and appeal process
to forensic patients, which allows them to submit griev-ances,
but does not allow them to appeal hospital decisions.
Civil seriously mentally ill patients can appeal to the Divi-sion
of Behavioral Health Services. However, the Depart-ment
has not adequately fulfilled its complaint investigation
and resolution responsibilities in several cases. Auditors’
review of the Division of Assurance and Licensure Services
and the Bureau of Emergency Medical Services found vari-ous
problems with complaint resolution.
n The Division of Assurance and Licensure Services is re-sponsible
for investigating complaints against childcare
providers, hospitals, nursing homes, home- and com-
Sunset Factors
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munity-based programs, supervisory care homes, be-havioral
health facilities, and hearing aid providers.
However, a review of the Division of Assurance and Li-censure
Services’ Medical Facilities Program revealed
that it does not always investigate complaints within the
time frames established by its own complaint prioritiza-tion
policy. Slow investigations have contributed to a
complaint backlog and limited the Program’s ability to
protect and serve the public (Auditor General Report
No. 98-17).
n The Division of Public Health is responsible for ad-dressing
complaints against emergency medical techni-cians,
paramedics, ambulance companies, other emer-gency
medical service entities, and private medical labo-ratories.
The Auditor General’s report (Auditor General
Report No. 99-6) found that the Division’s Bureau of
Emergency Medical Services has systematic problems in
how it handles formal and informal complaints, includ-ing
the lack of appropriate staff training, long delays, in-adequate
file tracking, and an inappropriate computer
tracking system. For example, approximately one in five
complaints took over a year to resolve; however, the Bu-reau
did not keep complainants adequately informed
throughout the complaint process. The Bureau recog-nizes
many of these problems and is beginning to make
further improvements in some areas (Auditor General
Report No. 99-6).
7. The extent to which the Attorney General or any other
applicable agency of state government has the author-ity
to prosecute actions under enabling legislation.
The Attorney General and the County Attorneys have
authority under Department statutes to prosecute unlawful
actions under the Department’s enabling legislation. Ac-cording
to Department officials, depending on the type of
unlawful action that has occurred, the responsible prose-cuting
entity is contacted by the appropriate division and
the matter is then pursued by that entity. For example, the
Division of Assurance and Licensure Services may, with the
assistance of the Attorney General’s Office, refer a legal ac-
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
tion related to a long-term care facility to the County Attor-ney
in the county in which the facility is located.
8. The extent to which the agency has addressed defi-ciencies
in the enabling statutes that prevent it from ful-filling
its statutory mandate.
During the 1999 legislative session the Department re-quested
or supported, and the Legislature approved, several
bills to address specific statutory deficiencies. Some key
pieces of legislation introduced and approved are as fol-lows.
n HB 2478– Restoration to Competency
The legislation eliminates the courts’ ability to commit
defendants to ASH in excess of its capacity. First, it
makes court-ordered commitment for restoration to
competency subject to funding appropriated by the
Legislature. Second, it states that ASH or the Depart-ment
is not required to provide restoration to compe-tency
treatment that exceeds the funded capacity. Also,
as part of several changes regarding prisoners sentenced
to death who are not competent to be executed, the leg-islation
requires the Department of Corrections, instead
of ASH, to provide housing for such prisoners.
n HB 2567– HIV Testing of Criminal Defendants
The law improves the Department’s ability to protect
public health by clarifying reporting requirements re-garding
HIV testing of defendants alleged to have
committed a sexual offense. It requires the prosecuting
attorney to provide information to the Department to fa-cilitate
notifying victims of test results, and requires
counseling in addition to notification of the defendant in
cases where test results are positive.
n HB 2039– Rural Private Primary Care Providers
The legislation enhances the Department’s mission to
promote quality health care by providing an annual ap-propriation
of $111,200 beginning in fiscal year 1999
from the Tobacco Tax Health Care Fund Medically
Needy Account to help medical students pay off school
loans in exchange for serving a minimum of two years
Sunset Factors
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OFFICE OF THE AUDITOR GENERAL
in an area of Arizona that is medically underserved. In
addition, the legislation adds dentists to the profession-als
eligible for the school loan repayment program.
The Department also sought several other legislative
changes in the 1999 session, which were not enacted.
Among those were bills to authorize the Arizona Health
Care Cost Containment System to reimburse up to 4 percent
of administrative costs for all tobacco tax-funded programs
administered by the Department, adopt the legislative
changes recommended by the Office of the Auditor General
in its audit of the Division of Assurance and Licensure
Services (Auditor General Report No. 98-17), repeal the
authority of the Department to regulate bedding manufac-turers,
and remove the requirement that emergency meas-ures
can be defined and prescribed only for new (as op-posed
to emerging or re-emerging) communicable or infec-tious
diseases or conditions under A.R.S. §§36-136 and 36-
136.03. Additionally, the Department sponsored other
measures to address deficiencies in its enabling statutes,
which were not adopted prior to the end of the legislative
session, such as House Bill 2592, which would have estab-lished
a program in the Department to analyze public
health risks associated with environmental exposures.
9. The extent to which changes are necessary in the laws
of the agency to adequately comply with the factors in
the Sunset Laws.
Previous reports from the Office of the Auditor General
identified several statutory changes the Legislature may
wish to consider.
In the performance audit of the Division of Assurance and
Licensure (Auditor General Report No. 98-17), the Auditor
General recommended:
n Modifying A.R.S. §§36-891, 36-897.06, and 36-431.01 to
allow the Division of Assurance and Licensure Services
to impose higher civil penalties against supervisory and
adult care homes and child care facilities that have been
chronically out of compliance with rules and regula-tions,
without requiring ALS to physically document
Sunset Factors
17
OFFICE OF THE AUDITOR GENERAL
each day a violation occurs, to reduce civil fines if a child
care facility waives its right to a hearing, and to use
monies collected for programs that improve the quality
of care;
n Modifying A.R.S. §§36-891.01 and 36-897.08 to allow in-termediate
sanctions to be imposed immediately against
child care facilities and possibly amending A.R.S. §§36-
427(C), 36-891.01(A), and 36-897.08(A) to allow for
mentoring and/or monitoring as intermediate sanction
options;
n Amending A.R.S. §36-887 to enable ALS to provide
public information over the telephone by removing the
signature requirement for reviewing child care public
files and require all licensed health and child care pro-viders
to post the availability of regulatory information
and to make this information available in an area acces-sible
to all consumers, through changes to A.R.S. §§36-
425(A), 36-882(L), and 36-897.01(H).
Auditor General Report No. 99-9, Department of Health
Services, Arizona State Hospital recommends:
n Allowing the Arizona State Hospital to hire an expert or
initiate an advisory body to assist in developing a re-quest
for proposal, preparing a detailed schedule and
budget, and overseeing contractors to ensure that a new
state hospital facility will meet the hospital’s needs.
Auditor General Report No. 99-6, Department of Health
Services, Bureau of Emergency Medical Services, recom-mends:
n Directing the Bureau of Emergency Medical Services to
form a study group to evaluate possible changes in the
manner in which Arizona regulates ambulance services.
This group would study various options, including li-censing
providers to ensure quality, without limiting
competition, by controlling the number of providers or
licensing providers and allowing local governments to
establish operating areas through a competitive process.
Sunset Factors
18
OFFICE OF THE AUDITOR GENERAL
Depending on the study group’s findings, statutory
changes to the Arizona Revised Statutes could be
needed.
10.The extent to which the termination of the agency
would significantly harm the public health, safety or
welfare.
Terminating the Department of Health Services would
likely require that other state agencies and local govern-ments
assume the Department’s functions because regula-tion
of health care and health care-related activities is neces-sary
for the protection of the public health, safety, and wel-fare.
The need for oversight, education, intervention, and
monitoring of health care and its activities is well-established.
All 50 states and the federal government regu-late
health care activities. Restaurant and food inspections,
child immunizations, newborn blood screening, psychiatric
inpatient services, nutrition programs, laboratory testing for
a variety of diseases, and public health surveillance are only
a few of the many activities within the Department that
have a significant impact on the public health, safety, and
welfare. For example, termination of the Department would
mean that citizens would have no protection or assurance
that medical or childcare facilities were operating within the
law or that the quality of care was being maintained. Addi-tionally,
the loss of immunization programs could leave
children vulnerable to disease and permanent disabilities.
The closure of the Arizona State Hospital would likely have
a significant impact on the court system, the sexually violent
persons program, and civilly committed patients. Also,
people would not be able to secure birth or death certificates
through the Office of Vital Records.
11.The extent to which the level of regulation exercised by
the agency is appropriate and whether less or more
stringent levels of regulation would be appropriate.
Audit work suggests that the Department of Health Serv-ices’
regulation is appropriate in most areas. However, audit
work conducted in the Bureau of Emergency Medical Serv-ices
found that the statutory Certificate of Necessity system
Sunset Factors
19
OFFICE OF THE AUDITOR GENERAL
provides more regulation than is necessary for overseeing
ambulance service and also limits competition among am-bulance
services. Additionally, the licensing of bedding
manufacturers by the Bureau of Epidemiology and Disease
Control Services appears to have little impact on protecting
the public health, safety, and welfare.
12.The extent to which the agency has used private con-tractors
in the performance of its duties and how effec-tive
use of private contractors could be accomplished.
The Department uses contracting extensively. A major use
of contractors by the Department is in the Division of Be-havioral
Health Services, which contracts services out to
Regional Behavioral Health Authorities (RBHAs). For fur-ther
information on sunset factors for the Division of Be-havioral
Health Services, see Auditor General Report No.
99-12. Housekeeping, grounds and engineering services,
and the pharmacy department at the Arizona State Hospital
have been contracted out to private companies. The Arizona
State Laboratory has privatized several functions in recent
years, such as routine throat cultures, urinalysis exams,
routine clinical testing for parasites (such as lice), respiratory
virus blood tests, asbestos testing, and tests for solvents in
soil. In 1997, the Division of Assurance and Licensure Serv-ices
used private-sector architects to reduce a backlog of ar-chitectural
reviews of childcare centers and group homes.
Sunset Factors
20
OFFICE OF THE AUDITOR GENERAL
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OFFICE OF THE AUDITOR GENERAL
Agency Response
Page 1 of 4
Arizona Department of Health Services (ADHS)
Response to Recommendations for the Agency Sunset Factors
The Division of Information Technology Services
Findings, Recommendations and Responses
Finding: The department [ADHS] has inadequate information technology support for many of its
functions. Specifically, the Division of Information Technology Services (ITS) has been
unable to provide the Bureau of Epidemiology and Disease Control with system
improvements, such as report format programming within the Tuberculosis Information
Management System (TIMS), or maintenance of existing services, such as the Internet
Web Site.
Response: The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
Actions: TIMS is a third party software package supplied and supported by the Center for
Disease Control, which explains ITS’ inability and/or unwillingness to implement system
improvements. ITS is addressing the issue of the Internet Web Site by defining and
establishing a position to serve as the agency Web Master. Recruitment and hiring will
take place toward the end of the calendar year. As an interim step, an ITS resource is
available on a part-time basis to assist and respond to inquires regarding modification to
the department Web site.
Finding: Programming changes at the Division of Behavioral Health Services (BHS) have
sometimes taken two years to make.
Response: The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
Actions: During the past several months, the joint ITS BHS application support team has
undergone management and programming staff changes. A process has been
implemented and workplans established to identify task and resource assignments with
BHS and ITS mutually agreeing upon priorities and timeframes. Weekly meetings are
conducted to monitor task and workplan status. This new process provides for issue
and priority conflict resolution and has significantly improved the turnaround time for
programming requests and system maintenance.
Page 2 of 4
Finding: The Division of Assurance and Licensure Services (ALS) suffers from a complaint
database that lacks sufficient controls to ensure accurate and consistent data entry and
fails to provide adequate information.
Response: The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
Actions: ITS and ALS are working to revise and integrate data fields in ALS’s complaint
tracking system and facilities database to improve the accuracy and consistency of the
data entry for both systems. ALS has also contracted with the Governor’s Office for
Excellence in Government (OEG) to assist in the consolidation of the current complaint
and facilities databases into the Health Care Financing Administration’s ASPEN
System. This integration will be a three-and-one-half year process. When completed,
it will improve the availability of essential elements of data information and eliminate the
duplication of data entry into multiple databases.
Finding: The complaint tracking system at the Bureau of Emergency Medical Services (EMS)
was developed for use in another division in ADHS and has not been modified to fit the
Bureau’s requirements.
Response: The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
Action: The ITS team supporting EMS is scheduled to address this issue after the completion of
their Year 2000 efforts. We anticipate that the definition of the requirements needed
for development of a new system designed specifically for EMS complaint tracking to
begin at the end of the calendar year.
Finding: The Arizona State Hospital (ASH) reported having no Local Area Network (LAN) or
voice mail, limited electronic mail, and no coordination or sharing of information
between departments and systems.
Response: The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
Action: These important issues are currently being addressed through the high-priority ASH
Automation project. The first phase of the project was successfully completed on July
1, 1999, which included the installation of a LAN and the deployment of 29
workstations connected to the ADHS Wide Area Network to provide access to
department e-mail and other departmental systems. Over the next two fiscal years,
Page 3 of 4
phase two of the project will provide connections for an additional 108 workstations.
Voice mail options are currently being reviewed for the ASH as well.
Finding: In December 1998, 40 of 120 funded positions were vacant within ITS. The inability
to recruit and retain staff has hampered the division’s ability to meet department
technology needs.
Response: The finding of the Auditor General is agreed to and the audit recommendations will be
implemented.
Actions: For fiscal year 2000, the division is allocated: 87.60 direct-funded full-time employees
(FTE); 16.40 indirect FTE; and 8 FTE that are 100% federally funded. Since
December 1998, the division has filled 27 vacant positions. Although the numbers
reflect an overall vacancy reduction, the division continues to contend with a 20%
vacancy rate in the programming staff. These positions include programmers, project
leaders and project managers. Of 35 positions, 8 (22%) are currently vacant.
Additionally, as positions are being filled, the division continues to receive resignations
from employees being offered 15-20% higher salaries from the private sector. While
the division has been successful in filling several key management and network support
positions, our inability to recruit and retain information technology professionals
continues to hamper the division’s ability to meet ADHS technology needs.
Page 4 of 4
The Division of Assurance and Licensure Services - Auditor General Report #98-17
The findings of the Auditor General are agreed to and the audit
recommendations will be implemented.
The Division of Behavioral Health Services - Auditor General Report #99-12
The findings of the Auditor General are agreed to and the audit
recommendations will be implemented.
The Bureau of Emergency Medical Services - Auditor General Report #99-6
The findings of the Auditor General are agreed to and the audit
recommendations will be implemented.
The Arizona State Hospital - Auditor General Report #99-9
The findings of the Auditor General are agreed to and the audit
recommendations will be implemented.
The Tobacco Education and Prevention Program - Auditor General Report #99-17
The findings of the Auditor General are agreed to and the audit
recommendations will be implemented.
The Bureau of Epidemiology and Disease Control - Auditor General Report #99-18
The findings of the Auditor General are agreed to and the audit
recommendations will be implemented.
OFFICE OF THE AUDITOR GENERAL
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Other Performance Audit Reports Issued Within
the Last 12 Months
98-15 Podiatry Board
98-16 Board of Medical Examiners
98-17 Department of Health Services—
Division of Assurance and Licensure
98-18 Governor’s Council on Develop-mental
Disabilities
98-19 Personnel Board
98-20 Department of Liquor
98-21 Department of Insurance
98-22 State Compensation Fund
99-1 Department of Administration,
Human Resources Division
99-2 Arizona Air Pollution Control
Commission
99-3 Home Health Care Regulation
99-4 Adult Probation
99-5 Department of Gaming
99-6 Department of Health Services—
Emergency Medical Services
99-7 Arizona Drug and Gang Policy
Council
99-8 Department of Water Resources
99-9 Department of Health Services—
Arizona State Hospital
99-10 Residential Utility Consumer
Office/Residential Utility
Consumer Board
99-11 Department of Economic Security—
Child Support Enforcement
99-12 Department of Health Services—
Division of Behavioral Health
Services
99-13 Board of Psychologist Examiners
99-14 Arizona Council for the Hearing
Impaired
99-15 Arizona Board of Dental Examiners
99-16 Department of Building and
Fire Safety
99-17 Department of Health Services’
Tobacco Education and Prevention
Program
99-18 Department of Health Services
Epidemiology and Disease Control
Services
Future Performance Audit Reports
Arizona State Board of Accountancy
Department of Environmental Quality