Dilllitrios Gakidis
Assistant Research Analyst
(602) 542-5987
Arizona House of Representatives
House Majority Research
MEMORANDUM
1700 w. Washington
phoenix, Xl 85007-2848
FAX (602) 542-4511
TO: JOINT LEGISLATIVE AUDIT COMMITTEE
Senator Ken Bennet, vx:nair
Representative Roberta L V 008, Cochair
DATE: December 12, 2001
SUBJECT: Sunset Review of the Arizona Commission on the Arts
Attached is the final report of the sunset review of the Arizona Commission on the Arts,
which was conducted by the House of Representatives Committee on Commerce and Economic
Development and the Senate Commerce Committee of Reference.
This report has been distributed to the following individuals and agencies·
Governor of the State of Arizona
The Honorable Jane Dee HuH
President of the Senate
Senator Randall Gnant
Senate Members
Senator John Verkamp, Cochair
Senator Marsha Arzberger
Senator Brenda Burns
Senator Darden Hamilton
Senator Ramon o. Valadez
Arizona Commission on the Arts
Office of the Auditor General
Department of Library, Ar·chives & Public Records
Speaker of the House
Representative Jim Weiers
House Members
Representative Carol Somers, Cochair
Representative Ken Chevront
Representative Gabrielle Giffords
Representative Steve Huffman
Representative Barbara Leff
House Majority Staff Senate Majority Staff
House Majority Research Staff Senate Majority Research Staff
House Minority Staff Senate Minority Staff
COMMITTEE OF REFERENCE REPORT
House of Representatives Committee on Commerce and Economic Development
Senate Committee on Commerce
ARIZONA COMMISSION ON THE ARTS
To: JOINT LEGISLATIVE AUDIT COMMITTEE
Senator Ken Bennett, Co-Chair
Representative Roberta L. Voss, Co-Chair
Date: November 29, 2001
Pursuant to Title 41, Chapter 27, Arizona Revised Statutes, the Committee of Reference, after
performing a sunset review and conducting a public hearing, recommends the following:
1. The Arizona Commission on the Arts be continuedfor ten years.
2. The role of the executive director be clarified.
COMMITTEE OF REFE
----f'l>'--~++'-=-.'--->i<::::::ol---------
Representative Carol Somers, Co-Chair
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Representative Ken Cheuvront
Senator Brenda Bums
COMMITTEE OF REFERENCE
House of Representatives Committee on Commerce and Economic Development
Senate Committee on Commerce
I. Background
Arizona Commission on the Arts
Final Report
Pursuant to §41-2953, Arizona Revised Statutes, the Joint Legislative Audit Committee
(JLAC) assigned the sunset review of the Arizona Commission on the Arts to the House of
Representatives Commerce and Economic Development and the Senate Commerce Committee of
Reference.. [Attachment A]
II. Committee of Reference Sunset Review Procedure
The Committee of Reference held one public hearing on Thursday, November 29,2001, to
review the performance audit of the Arizona Commission on the Arts prepared by the Office of the
Auditor General and to receive public testimony. [Attachment B]
At the public hearing, the Committee heard testimony from the following.
• Ryan Cyrtis, Senior Performance Auditor, Office of the Auditor General
• Shelley Cohn, Executive Director, Arizona Commission on the Arts
Staff from the Office of the Auditor General provided a power point computer presentation
outlining information regarding the Arizona Commission on the Arts, including background and
history. In addition, the Staff summarized internal organization and management problems that need
to be rectified in order for the Commission on the Arts to function more effectively in the public
interest. The presentation summarized the Auditor General's findings as follows:
• The Commission's grants benefit organizations and projects statewide.
• The Commission needs to improve its management of the Endowment Program.
• The Commission appears to meet its objectives.
• The Legislature should consider establishing the Executive Director's position in statute.
Established in 1966 as the result of an executive order, the Commission on the Arts' mission
is to encourage the presentation and appreciation of the performing and fine arts throughout Arizona
The Commission's existence makes Arizona eligible to receive federal funding through the National
Endowment for the Arts . The Commission provides fmancial assistance to artists or organizations for
art projects, and sponsors programs that make art accessible to rural communities . The Commission
consists of 15 Governor-appointed members who serve three-year terms The executive director
directs 20 staff members. Ten of these members perform administrative duties, while the other ten
manage the Commission's art programs and provide services to grant applicants and recipients
The Auditor General Staff noted in their first finding that the Commission's grants benefit
organizations and projects statewide, while they are competitively awarded using defined criteria An
equal amount of money (approximately $1.1 in fiscal year 2001) was awarded in the form of grants
to both large and smaller arts organizations The second finding stipulated that the Commission needs
to improve its management of the Endowment Program. The Endowment Program was established
in 1996 by the Legislature in order to allow the Commission to receive donations made to foundations
under contract with the Commission. The reason for this is because private donors are sometimes
more inclined to donate money to private foundations as opposed to government agencies.. The
Commission had been overcharged $17,.5.50 in administrative costs by one of these contracted
foundations .. The third finding was that the Commission operates in an overall efficient manner, and
it meets its objectives. The fourth finding is that the role of the executive director needs to be clarified
in statute in order to allow discretionary responsibilities to the director and relieve the Commission
members from making day-to-day operating decisions .
The executive director of the Commission on the Arts noted that the Commission is well
respected nationally, and is recognized by the National Endowment for the Arts as one of the best
Art Commissions in the country. In response to the Report of the Auditor General, the director noted
that the Commission has taken steps to address the Report's findings and recommendations.
III. Committee Recommendations
The Committee of Reference recommends that the Arizona Commission on the Arts be
continued for 10 years and that the role and the responsibilities of the executive director be clarified.
IV. Statutory Report Pursuant to Section 41-2954, Arizona Revised Statutes
[Attachment C]
V. Attachments
A Meeting Notice
B. Minutes of Committee of Reference Hearing
C. Commission on the Arts Report to Committee of Reference
R&VIS&D 11,115,101
REVISED 11/28/01
2:15p.m.
ARIZONA STATE LEGISLATURE
Joint Interim Meeting Notice
Open to the Public
COMMITTEE OF REFERENCE
ATTACHMENT A
House Committee on Commerce and Economic Development and
Senate Committee on Commerce
SUNSET REVIEW HEARINGS
DATE: Friday, November 16, 2001 Thursday, November 29,2001
TIME: 9:00 A.M. 3:30 P.M. or upon adjournment of Senate Government
PLACE: House Hearing Room 3 House Hearing Room 5
AGENDA
9:00 A.M. Sunset - Commission on the Arts
• Office of the Auditor General
• Agency Response
• Public Testimony
• Recommendations
*10~OO A.M. Sunset - Department of Real Estate
• Office of the Auditor General
• Agency Response
• Public Testimony
• Recommendations
*Meetings scheduled to begin upon adjournment of the Sunset Review on the
Commission of the Arts.
MEMBERS:
Senator Verkamp, Cochair
Senator Arzberger
Senator Burns
Senator Hamilton
Senator Valadez
kp
11/2g/2001 11128/01
Representative Somers, Cochair
Representative Cheuvront
Representative Giffords
Representative Huffman
Representative Leff
People with disabilities may request reasonable accommodations such as interpreters,
alternative formats, or assistance with physical accessibility. If you require
accommodations, please contact the Chief Clerk's Office at 602-542-3032,
(TOO) 542-6241.
ARIZONA STATE LEGISLATURE
Forty-fifth Legislature - First Regular Session
COMMITTEE OF REFERENCE
ATTACHMENT B
HOUSE COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT
and
(Tape 1, Side A)
SENATE COMMITTEE ON COMMERCE
SUNSET REVIEW HEARINGS
Minutes of Meeting
Thursday, November 29,2001
House Hearing Room 5 -- 3:30 p.m.
Cochairman Somers called the meeting to order at 3:32 p.m. and attendance was noted by the
secretary.
Senator Arzberger
Senator Valadez
Senator Verkamp, Cochairman
Senator Burns
Senator Hamilton
Members Present
Representative Cheuvront
Representative Giffords
Representative Huffman
Representative Leff
Representative Somers, Cochairman
Members Absent
Speakers Present
Ryan Curtis, Senior Performance Auditor, Office of the Auditor General
Shelley Cohn, Executive Director, Arizona Commission on the Arts
Ann Orrico, Manager, Auditor General's Office
Jerry Holt, Commissioner, Arizona Department of Real Estate
Tom Farley, representing the Arizona Association of Realtors
Raoul Jacques, Attorney, Phoenix, representing himself
Sharon Peterson, Real Estate Broker/President, Land Registrations
Michael Woolf, Phoenix, representing himself
Opening Remarks
Cochairman Somers thanked everyone for making the effort to attend after numerous
cancellations caused by the cunent Special Session.
COMMITTEE OF REFERENCE HOUSE CED
and SENATE COMMITTEE ON COMMERCE
SUNSET REVIEW HEARINGS
November 29,2001
A House of Representatives staff outline of audit recommendations for the Arizona Commission
on the Arts and Department of Real Estate was made available to Members (Attachment I),
Sunset Review - ARIZONA COMMISSION ON THE ARTS
Ryan Curtis, Senior Performance Auditor, Office of the Auditor General, presented the
findings and recommendations of the audit of the Arizona Commission on the Arts (see copy
presentation, Attachment 2). Following a review of the Commission's mission and funding he
highlighted the following audit findings:
• That the Commission's grants program provides various benefits to organizations
and projects statewide"
• That the Commission needs to improve its management of the Endowment Program.
• That the Commission appears to meet its objectives, and operates efficiently ..
• That the Legislature should consider establishing the Executive Director's position
in statute.
He responded to questions and advised that the Commission has concurred with the findings.
Shelley Cohn, Executive Director, Arizona Commission on the Arts, voiced her appreciation
for the thoroughness of the audit and reported that the Commission has worked with a strategic
plan with citizen input. She called attention to a Commission Report to the Governorfor Fiscal
Year 2000 (Attachment 3) and a copy of "Linking Up. Strategic Connections for the Future of
the Arts in Arizona 2000-2006" (Attachment 4). Ms .. Cohn emphasized that the Commission
supports strong communities and invests in cultural activities and innovative programs thr'Oughout
the state, such as the Artist Teacher program. She reported that the Commission is well
respected nationally, and is recognized by the National Endowment for the Arts as one of the
best state arts commissions in the country. She concluded by noting that the terrorist attacks on
September 11 th have presented both opportunities and challenges for the arts in Arizona.
In response to a query from Mrs. Leff, Ms. Cohn confirmed that the Commission is addressing
the Auditor General's findings and recommendations.
Senator Verkamp moved that the Committee of Reference recommend that
the Commission on the Arts be continued for ten years and that the role and
responsibilities of the Executive Director be clarified.
The motion carried by a roll call vote of 8-0-0-2 (Attachment 5) ..
Sunset Review - ARIZONA DEPARTMENT OF REAL ESTATE
Ann Orrico, Manager, Auditor General's Office, presented the performance findings and
recommendations in regard to the audit of the Arizona Department of Real Estate (see copy,
Attachment 6). Highlights of the findings and recommendations include the following:
• A need to improve complaint handling practices.
• Inconsistent discipline of real estate law violators.
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COMMITTEE OF REFERENCE HOUSE CED
and SENATE COMMITTEE ON COMMERCE
SUNSET REVIEW HEARINGS
November 29,2001
• The Recovery Fund is costly and cumbersome to administer. Recommend
transferring authority from the courts to the Real Estate Commissioner.
• Public information practices impede consumers' access to licensee information.,
Mrs" Leff asked why dismissed complaints should show on a licensee's record. Ms. Orrico said
the intent is to provide public protection. Ms. Giffords noted that the Better Business Bureau will
inform a caller how many complaints have been filed and how many have been dismissed"
Cochairman Somers inquired why a pending issue needs to be reported. Ms. Orrico observed that
her office traditionally makes such recommendations in the interest of public protection.
Jerry Holt, Commissioner, Arizona Department of Real Estate, testified that the main
functions of the Department are (i) to ensure that licenses are not granted to persons whose track
record indicates potential harm to the public; and (ii) to ensure that those persons who should not
continue to hold a license have their license suspended or revoked. He pointed out that the audit
did not find anyone who holds a license who should not do so, and said he agrees with most of
the audit recommendations. In regard to the handling of complaints, he advised that procedures
have been modified and customer service representatives retrained. He reviewed a brochure
entitled "The Complaint Process" (Attachment 7) that contains useful information for customers.
Mr. Holt voiced concern, however, with the following two recommendations (see also
Attachment 8):
• Specific guidelines for investigators" He noted that investigators are trained and
certified, and there is concern that a "checklist" could inadvertently create grounds
for dismissal of cases.
• To strengthen public information policies to provide all information over the telephone.
He said the Department disagrees with giving out information on pending (open)
investigations, and noted that most other Western States do not do so either.
Mr. Holt cited the Department's accomplishments, including establishment and maintenance of
an excellent website and computerized system, notwithstanding a lower payroll and an increase
in total operating expenses of just eleven percent over the past eleven years. He noted that
customer satisfaction surveys ar'e conducted on a regular basis, and urged extension of the
Department for ten years.
Cochairman Somers voiced concern over the two findings on which there is disagreement.
Mr. Holt pointed out that the Department is working with the Office of Excellence in
Government (OEG) over the disciplinary guidelines issue. In response to a query by Mrs. Leff,
he noted that a majority of other state agencies do not use checklists, although he was not told by
OEG which do. He added that cost savings would be achieved if the Commissioner makes
decisions on claims because of the elimination of lawyer fees.
Senator Verkamp called attention to the fact that in sixteen of thirty cases the investigator did not
talk to the complainant. Mr. Holt said that policy has been changed in response to the Auditor
General's recommendation and all complainants are now contacted. He pointed out, however,
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COMMITTEE OF REFERENCE HOUSE CED
and SENATE COMMITTEE ON COMMERCE
SUNSET REVIEW HEARINGS
November 29,2001
that if a complaint form was thoroughly filled in there may have been no need to talk to the
complainant. Mr. Holt confirmed that claims are moving forward since the Department has been
implementing the audit recommendations.
Public Testimony
Torn Farley, representing the Arizona Association of Realtors, testified that the Association
represents around 27,000 of the state's 46,000 current licensees. He stated support for a 10-year
continuation of the Department, as well as for its position on the two disputed recommendations
and the changes to the Recovery Fund.
Mrs .. Leff called attention to newspaper reports that the audit found that the Department protects
licensees more than customers. Mr. Farley responded that he does not believe that is the case.
Raoul Jacques, Attorney, Phoenix, representing himself, said he works with the Department of
Real Estate, is satisfied with its performance, and supports its continuation.
Sharon Peterson, Real Estate Broker/President, Land Registrations, testified that she works with
Mr. Jacques. She added that there have been many changes at the Department and she and her
clients are extremely satisfied with the job it does.
Michael Woolf, Phoenix, representing himself, said he is an attorney who represents clients on
the other side of the Department He pointed to the important role played by the agency and
voiced agreement with most of Mr. Holt's remarks. He stated support for the Recovery Fund
recommendation and disputed the conclusion of the Arizona Republic article.
Ms. Giffords remarked that ten years is a long time to wait for another audit while the complaint
process remains unresolved.
(Tape 1, Side B)
Ms. Orrico confirmed that the Auditor General's Office will follow up with the Department in
six months and report back to the Legislature.
Senator Verkamp moved that the Committee of Reference recommend that the
Department of Real Estate be continued for ten years and that the authority for
approving Recovery Fund claims be transferred from the courts to the Real Estate
Commissioner.
The motion carried by a roll call vote of 6-0-0-4 (Attachment 9).
Without objection, the meeting adjourned at 4:41 p.m.
Carole Price, Committee Secretary
December 3, 2001
(Original minutes, attachments and tape are on file in the Office of the Chief Clerk.)
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COMMITTEE OF REFERENCE HOUSE CED
and SENATE COMMITTEE ON COMMERCE
SUNSET REVIEW HEARINGS
November 29,2001
ATTACHMENT C Vest Roosevelt Street
Arizona 8500.3.·1326
phone: 602/255-5882
fax: 602/256-0282
e-mail: general@ArizonaArts.org
website: http://azarts.asu edu/arLscomm
,~ an equal opportunity agency
November 14, 2001
Dear Members of the Committee of Reference:
We are pleased to respond to the following four questions::
1. Identification of the problem or needs that agency is intended
to address:
Through a long range planning process with constituent input,
review and endorsement, the Arizona Commission on the Arts
refreshed its vision and mission statements, and adopted them in
February 2000 ..
MISSION STATEMENT: To enhance the artistic development of
all Arizona communities, arts organizations and artists through
innovative partnerships and stewardship of public funds ..
2. A statement of the objectives of such agency and its
anticipated accomplishments.
Our plan's five-year goals are:
• All people in Arizona have access to diverse arts experiences
• Artistic and management skills of artists and arts organizations
are strengthened
• The essential role of the arts in teaching and learning,
particularly K-12, is accomplished
• Access to arts information is provided through both "high-tech"
and "high-touch" services
• Public policy is favorable towards Arizona's arts industry
• Stable financial resources to implement the plan exist
Objectives and performance measures in relation to each goal have been
developed and adopted by the Commission; documentation is presented
at least annually for Commission review and assessment prior to adopting
new objectives .. These measures are also submitted to the Governor's
Office of Strategic Planning and Budgeting and Joint Legislative Budget
Committee.
Selected accomplishments
• Fiscal year 2001 reports that 6,1453,466 individuals participated in
programs supported with Arts Commission funds
The mission of the Ar'izona Commission on the Am is to enhance the artistic development of all Arizona communities, am organizations and artists through innovative
partnerships and stewardship of public funds. We envision an Arizona where all citizens experience the am as integral to their lives. Call today for more mformatlon.
• The state's fiscal year 2001 investment resulted in projects that
generated financial commitments of $81 ,728,600 from individuals,
corporations and foundations
• Efforts to increase participation and funding to projects in rural and
ethnic communities have been successful in increasing access and
participation
• Grantees report that state funds have helped them increase the
quality of their programs, stabilize the infrastructure of their
organizations, reach out to new audiences and learn ways to integrate
the arts into curriculum to affect student learning ..
• Satisfaction ratings for Commission activities and programs are 7.4
out of 8 .. 0
3. An identification of any other agencies having similar,
conflicting or duplicate agendas, and an explanation of how
the agency in question avoids duplication and/or conflict with
other agencies.
The agency is not aware of other agencies that have conflicting or
duplicate agendas. The agency works in partnership with other agencies
where the Arts Commission provides appropriate expertise and
knowledge to collaborative projects. Partnerships exist with the
Department of Education, Department of Commerce, Department of
Transportation to accomplish shared goals with each agency providing
appropriate information, resources and expertise.
4. An assessment of the consequences of consolidating or
eliminating the agency altogether.
By consolidating or eliminating the agency, the state would risk the loss of
significant funds from the National Endowment for the Arts .. The NEA
requires a designated state agency that has a separate board and
develops and implements a responsive statewide plan .. As well, the
agency has received other funds from outside sources including the
Wal/ace-Reader's Digest Fund that would be in jeopardy without a
designated state arts agency .. Arizona would be the only u..S .. state or
territory without a designated state arts agency ..
Arizona arts organizations and artists are also small businesses; they
contribute notably to the Arizona economy and are an attraction to other
businesses as welL The state's investment through the Arts Commission
generates additional funds from the private sector and generates new
jobs in the workforce, contributing to income, sales and property taxes for
the state .
Education in the arts is required for K-12 students by the State Board of
Education. The arts teach students vital skills and integrate with other
areas of the curriculum. The Department does not provide support to
schools and districts about how to develop and implement a quality arts
, education program. The Arts Commission provides funding and technical
assistance to schools to connect to artists and arts organizations.
Another aspect of Commission work is to support the preservation of our
state's diverse cultures .. The agency provides training and grant support
for tribal museums, community festivals and other projects that preserve
and present to the public the heritage of Arizona's communities.
In the face of the extensive population growth in Arizona, ·new residents
from other places have high expectations of the quality of the arts
offerings available to them. The state's leadership and investment in the
arts contributes to meeting the expectations of residents ..
In the new economy environment, it is recognized that businesses and
workers can locate anywhere. Businesses look for communities with a
high quality of life including vibrant arts amenities .. We must provide
interesting places to attraCt and keep workers to compete in this business
environment.
Since the tragedies of September 11, people have come together to
express themselves, laugh, cry and heal through poetry, music, theater,
dance and the visual arts. The arts are a vital part of the fabric of
communities in troubling times as well as in times of celebration.
The state's investment in the arts agency indicates a commitment to the
quality of life for citizens and the asset the arts provide in attracting and
keeping economic development and tourism.
The Arizona Commission on the Arts has been recognized as a leader
nationally for the quality of its programs and services.
