A performance audit of the Department of Emergency and Military Affairs

              STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
A PERFORMANCE AUDIT
OF THE
DEPARTMENT OF EMERGENCY
AND MILITARY AFFAIRS
APRIL 1983
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 83- 7
DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
April 19, 1983
Members of the Arizona Legislature
The Honorable Bruce Babbitt, Governor
Major General John Smith, Adjutant General
Department of Emergency and Military Affairs
Transmitted herewith is a report of the Auditor General, A Performance
Audit of the Department of Emergency and Military Affairs. This report is
in response to a January 18, 1982, resolution of the Joint Legislative
Oversight Committee. The performance audit was conducted as a part of the
Sunset Review set forth in A. R. S. § § 41- 2351 through 41- 2379.
The blue pages present a summary of the report; a response from the
Department of Emergency and Military Affairs is found on the yellow pages
preceding the appendices.
I,
My staff and I will be pleased to discuss or clarify items in the report.
Respectfully submitted,
~ ouHasR. Norton
Auditor General
Staff : William Thomson
Peter N. Francis
Michael T. Murphy
Dawn R. Sinclair
Stephen G. Adelstein
Urs C. Bauder
Addie L. Ceballos
Arthur E. Heikkila
Richard D. Stephenson
1 1 1 WEST MONROE SUITE 600 PHOENIX. ARIZONA 85003 ( 602) 255- 4385
OFFICE OF THE AUDITOR GENERAL
A PERFORMANCE AUDIT OF THE
DEPARTMENT OF EMERGENCY
AND MILITARY AFFAIRS
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 83- 7
TABLE OF CONTENTS
DIVISION OF EMERGENCY SERVICES
OFFICE OF FIRE MARSHAL
DIVISION OF MILITARY AFFAIRS
APPEND1 CES
APPENDIX I - Attorney General Opinion 181- 103,
September 11, 1981
APPENDIX I1 - Legislative Council Memorandum 0- 82- 19,
December 27, 1982
APPENDIX I11 - Legislative Council Memorandum 0- 81- 20,
April 23, 1981
APPENDIX IV - Legislative Council Memorandum 0- 82- 20,
December 27, 1982
APPENDIX V - Attorney General Opinion 180- 015,
February 4, 1980
APPENDIX VI - Legislative Council Memorandum 0- 82- 21,
December 27, 1982
APPENDIX VII - Attorney General Memorandum,
August 19, 1975
DEPARTMENT OF EMERGENCY
AND MILITARY AFFAIRS
DIVISION OF EMERGENCY SERVICES
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND
SUNSET FACTORS
FINDINGS
FINDING I
T h e D i v i s i o n has m i s m a n a g e d at least $ 1.4 m i l l i o n
i n S t a t e and Federal funds.
CONCLUSION
RECOMMENDAT IONS
FINDING I1
T h e D i v i s i o n failed t o c o m p l y w i t h c o m p e t i t i v e
bidding r e q u i r e m e n t s .
CONCLUSION
RECOMMENDATIONS
FINDING I11
T h e D i v i s i o n has m i s u s e d personnel and c i r c u m v e n t e d
the S t a t e m e r i t s y s t e m .
CONCLUSION
RECOMMENDAT IONS
AREAS FOR FURTHER AUDIT WORK
WRITTEN RESPONSE TO AUDITOR GENERAL'S REPORT
- Page
i
1
LIST OF TABLES
- Page
TABLE 1 -
TABLE 2 -
TABLE 3 -
TABLE 4 -
TABLE 5 -
TABLE 6 -
TABLE 7 -
TABLE 8 -
Actual Revenues f o r F i s c a l Years 1978- 79
through 1981- 82
Actual Expenditures f o r F i s c a l Years 1978- 79
through 1981- 82
Summary of Disposition of Funds f o r Santa Cruz
County Flood Emergency Account, Globe Asbestos
Emergency Account and T r a i l e r Upgrade Grant
Account Funds Reviewed
Sources and Disposition of Funds f o r Santa
C ~ U Z County Flood Emergency Account
Sources and Disposition of Funds f o r Globe
Asbestos Emergency Account
Sources and Disposition of Funds f o r T r a i l e r
Upgrade Grant Account
Summary of ADES I n t e r n a l Audits of Emergency
Fund Accounts
P o t e n t i a l S t a t e L i a b i l i t y Resulting from
Mismanagement of Federal Funds i n the T r a i l e r
Upgrade Grant Account
LIST OF FIGURES
- Page
FIGURE 1 - DPS Airplane Repaired with Santa Cruz County
Flood Emergency and Other Funds
FIGURE 2 - ADES Mobile Communications Van Purchased with
Santa Cruz County Flood Emergency and Other Funds 19
FIGURE 3 - I n t e r i o r of ADES Mobile Communications Van 20
FIGURE 4 - National Guard Mess H a l l Constructed with
T r a i l e r Upgrade and Other Funds
FIGURE 5 - Timing of Expenditures and Transfers from
the Santa Cruz County Flood Emergency Account 2 8
FIGURE 6 - Timing of Expenditures and Transfers from the
Globe Asbestos Emergency Account 2 9
FIGURE 7 - Transfers and Expenditures from the J o i n t Clearing
Account f o r Operating Expenses During October and
November 1980
The Office of the Auditor General has conducted a performance a u d i t of the
Department of Emergency and M i l i t a r y A f f a i r s , Division of Emergency
Services, i n response t o a January 18, 1982, r e s o l u t i o n of t h e J o i n t
L e g i s l a t i v e Oversight Committee. This performance a u d i t was conducted a s
a part of the Sunset review s e t f o r t h i n Arizona Revised S t a t u t e s ( A. R. S.)
§ § 41- 2351 through 41- 237 9.
The Division of Emergency Services ( ADES) grew out of the Department of
C i v i l Defense. The L e g i s l a t u r e e s t a b l i s h e d the Department of C i v i l
Defense i n 1951 t o prepare f o r and carry out emergency f u n c t i o n s . In
1971, the agency was renamed the Division of Emergency Services ( ADES) and
placed within the Office of the Governor. The Division was t r a n s f e r r e d t o
the Department of Emergency and M i l i t a r y A f f a i r s i n 1972. R e s p o n s i b i l i t y
for the f i r e marshal program was added i n 1982.
The Division is responsible f o r 1) e s t a b l i s h i n g , organizing and
maintaining d i s a s t e r preparedness and emergency programs; 2 ) c o o r d i n a t i n g
plans and programs with p o l i t i c a l subdivisions; and 3) developing an
emergency response plan f o r fixed nuclear f a c i l i t i e s .
ADES' objective of e s t a b l i s h i n g and maintaining a comprehensive
coordinated emergency management program is c o n s i s t e n t with l e g i s l a t i v e
i n t e n t . Specific program a c t i v i t i e s a r e 1) hazard m i t i g a t i o n , including
hazard i d e n t i f i c a t i o n , floodplain management and community r e l o c a t i o n ;
2) emergency response plan development and t e s t i n g ; 3) r a d i o l o g i c a l survey
equipment maintenance and c a l i b r a t i o n ; and 4) t r a i n i n g and education.
Our a u d i t addressed s i g n i f i c a n t f i n a n c i a l , procurement and personnel
problems a t ADES. These problems were pervasive and r a i s e s e r i o u s questions
about the adequacy of t h e c o n t r o l s over these areas. Because of the serious
nature of these problems and the p o t e n t i a l f o r both criminal and c i v i l
v i o l a t i o n s of law, the Attorney General's Office was informed of our
findings. The Attorney General has i n i t i a t e d an i n v e s t i g a t i o n .
ADES has mismanaged s u b s t a n t i a l amounts of S t a t e and Federal monies. The
Division has inappropriately spent o r t r a n s f e r r e d a t l e a s t $ 1.4 m i l l i o n . As
a r e s u l t , the S t a t e may be required t o repay misspent Federal funds. This
extensive f i n a n c i a l mismanagement occurred because 1) the former d i r e c t o r of
the Division f a i l e d t o exercise h i s r e s p o n s i b i l i t y t o ensure t h a t funds were
properly expended and accounted f o r , and 2) i n t e r n a l c o n t r o l and accounting
procedures were e i t h e r inadequate or lacking. The Division needs t o
strengthen its accounting system t o provide adequate c o n t r o l s . Further, an
i n t e r n a l a u d i t o r r e p o r t i n g t o the Ad jutant General should conduct f i n a n c i a l
and compliance a u d i t s of emergency fund accounts ( see page 13).
The S t a t e may have incurred excessive c o s t s because the Division has
c o n s i s t e n t l y disregarded, and i n some instances circumvented, both S t a t e and
Federal competitive bidding requirements. ADES f a i l e d t o s o l i c i t bids,
placed orders with vendors before a d v e r t i s i n g f o r bids and s p l i t payments
i n t o amounts l e s s than $ 5,000 t o avoid bidding. We a l s o found t h a t ADES
made emergency purchases without obtaining waivers required by S t a t e law. ( I
Statutory changes are needed t o 1 ) serve as a d e t e r r e n t and 2) provide the
S t a t e with recourse when such v i o l a t i o n s occur. I n t e r n a l a u d i t s should
include reviews of procurement procedures t o ensure t h a t the Division
complies with bidding requirements ( see page 37).
Division personnel p r a c t i c e s have v i o l a t e d S t a t e merit system
requirements. Beginning i n 1981, the Department of Administration -
Personnel Division ( DOA- Personnel) i d e n t i f i e d numerous questionable
personnel p r a c t i c e s a t ADES. More r e c e n t l y , our audit found t h a t ADES has
circumvented the S t a t e merit system by 1) misusing exempt p o s i t i o n s and
2) using employees t o perform work unrelated t o t h e i r o f f i c i a l d u t i e s
including tasks c l e a r l y unrelated t o Division a c t i v i t i e s . Many of the
problems i d e n t i f i e d have not been adequately addressed.
ADES' questionable personnel p r a c t i c e s c r e a t e unnecessary and excessive
c o s t s , t h r e a t e n the c r e d i b i l i t y of t h e S t a t e merit system and jeopardize
f u t u r e Federal funding f o r t h e Division. ADES should f i l l competitively
two p o s i t i o n s c u r r e n t l y held by exempt employees. DOA- Personnel a n a l y s t s
should review s t a f f i n g l e v e l s and conduct a comprehensive c l a s s i f i c a t i o n
study ( see page 45).
Further review is needed i n s e v e r a l a r e a s . During our a u d i t we i d e n t i f i e d
p o t e n t i a l problems including the 1) use of p r o f e s s i o n a l s e r v i c e s
c o n t r a c t s , 2) extent t o which agency programs have a c t u a l l y protected the
public, and 3) completion of a l l State- and Federal- required t a s k s ( see
page 55).
iii
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance a u d i t of the
Department of Emergency and M i l i t a r y A f f a i r s , Division of Emergency
Services i n response t o a January 18, 1982, r e s o l u t i o n of t h e J o i n t
L e g i s l a t i v e Oversight Committee. This performance a u d i t was conducted a s
a p a r t of the Sunset review s e t f o r t h i n Arizona Revised S t a t u t e s ( A. R. S.)
$ § 41- 2351 through 41- 237 9.
The Division grew out of the Department of C i v i l Defense. The L e g i s l a t u r e
e s t a b l i s h e d t h e Department of C i v i l Cefense i n 1951 t o prepare f o r and
carry out emergency functions. These functions included rescue, a i r r a i d
warning s e r v i c e s , communications, evacuation and o t h e r a c t i v i t i e s r e l a t e d
t o c i t i z e n protection. I n 1971, the agency was renamed the Division of
Emergency Services ( ADES) and placed within t h e O f f i c e o f the Governor.
The Division was t r a n s f e r r e d t o the Department of Emergency and M i l i t a r y
A f f a i r s i n 1972. R e s p o n s i b i l i t y f o r the f i r e marshal program was added i n
1982.
The agency was e s t a b l i s h e d t o
". . . cope with the e f f e c t s of n a t u r a l , war- caused o r
other man- made d i s a s t e r s which endanger l i f e , property
and resources of t h i s s t a t e , and t o provide f o r t h e
h e a l t h , welfare and s a f e t y of the people of t h i s s t a t e
and f o r p r e s e r v a t i o n of property. . . ."
The Division is responsible f o r 1 ) coordinating emergency response during
d i s a s t e r s , 2) preparing f o r f u t u r e d i s a s t e r s , and 3) developing a
response plan f o r accidents a t the nuclear generating f a c i l i t i e s . To
f u l f i l l its s t a t u t o r y r e s p o n s i b i l i t i e s , ADES administers a number of
programs :
Hazard m i t i g a t i o n , including hazard i d e n t i f i c a t i o n , flood plan
management and community r e l o c a t i o n ;
Plan development and t e s t i n g f o r emergencies r e s u l t i n g from
nuclear war or n u c l e a r g e n e r a t i n g s t a t i o n operations;
Maintenance and c a l i b r a t i o n of r a d i o l o g i c a l survey equipment; and
e Training and education for public o f f i c i a l s and emergency s t a f f .
a
The Division receives funding from both S t a t e and Federal sources. S t a t e
fund sources include 1 ) General Fund appropriations f o r regular
operations, 2) General Fund monies designated f o r s t a t e s of emergency
declared by the Governor, and 3) a d d i t i o n a l a p p r o p r i a t i o n s f o r s p e c i f i c e
p r o j e c t s such a s nuclear f a c i l i t y d i s a s t e r response. ADES a l s o receives
Federal funds from the Federal Emergency Management Agency f o r regular
Division operations. Other Federal agencies, such a s the Department of
Housing and Urban Development ( HUD), provide g r a n t s f o r d i s a s t e r - r e l a t e d
programs such a s housing r e l o c a t i o n . The D i v i s i o n ' s revenues and
expenditures f o r f i s c a l years 1978- 79 through 1981- 82 a r e d e t a i l e d i n
Tables 1 and 2.
TABLE 1
ACTUAL REVENUES FOR
FISCAL YEARS 1978- 79 THROUGH 1981- 82
F i s c a l Year
19 78- 7 9 1979- 80 1980- 81 1981- 82
S t a t e :
Regular appropriations $ 135,900 $ 150,800 $ 553,100 $ 839,000**
Emer- g ency funds 736,528 2,300,000 2,150,000 - 0-
Special p r o j e c t s
Subtotal
Federal :
Regular operations N/ A* 515,519 1,072,300 915,548
Grants- in- aid N/ A 1,477,555 857,048 1,249,548
Pass- through funds - 0- 1,910,000 3,121,706 - 0-
Subtotal - 0- 3,903,074 5,051,054 2,165,096
Total - a l l sources $ 1,872.428 $ 6,478,874 $ 8,054,154 $ 3,304,096
Source: Department of Administration - Finance Division budget and
f i n a n c i a l records
* Not a v a i l a b l e
** Includes appropriation f o r Office of F i r e Marshal, t r a n s f e r r e d t o the
Division a s of January 1, 1982.
ACTUAL EXPENDITURES FOR FISCAL YEARS 1978- 79 THROUGH 1981- 82*
A c t i v i t y
Personal s e r v i c e s
Employee- related
P r o f e s s i o n a l s e r v i c e s
Travel:
In- State
Out- of- State
Other operating
Equipment
P r o j e c t refunds
krdergency Services
a s s i s t a n c e
Source t o t a l
Total
1978- 79 1979- 80 1980- 81 1981- 82**
- S t a t e - Federal Total State Federal Total - S t a t e Federal Total S t a t e Federal - T o t a l
Source: Department of Administration - Finance Division budget records
* Excludes expenditures of S t a t e emergency funds, s p e c i a l a p p r o p r i a t i o n s , Federal g r a n t s f o r s p e c i f i c p r o j e c t s and Federal pass- through r e l i e f funds. ** Due t o d e f i c i e n c i e s i n t h e D i v i s i o n ' s accounting records a s discussed i n the body of t h e r e p o r t , r e p o r t e d e x p e n d i t u r e s a r e approximations.
Audit Scope
Our a u d i t addressed s i g n i f i c a n t f i n a n c i a l , procurement and personnel
problems a t ADES. These problems were pervasive and r a i s e s e r i o u s
questions about the adequacy of the c o n t r o l s over these a r e a s . Because of
the s e r i o u s nature of these problems and the p o t e n t i a l f o r both criminal
and c i v i l law v i o l a t i o n s , t h e Attorney General's Office was informed of
our f i n d i n g s . The Attorney General has i n i t i a t e d an i n v e s t i g a t i o n .
S p e c i f i c a l l y , we reviewed the following i s s u e s :
a Propriety of expenditures and accounting procedures;
@ Compliance with s t a t u t o r y bidding procedures; and
Appropriateness of Division personnel p r a c t i c e s .
Additionally, we i d e n t i f i e d numerous p o t e n t i a l l y s e r i o u s problems t h a t we
were unable t o review. Our a u d i t scope was l i m i t e d due t o the extensive
time required t o review the i s s u e s i d e n t i f i e d above. The a u d i t work was
f u r t h e r hindered by the absence of a u d i t t r a i l s and l a c k of
documentation. Other problems we i d e n t i f i e d a r e discussed i n the " Areas
f o r Further Audit Work" s e c t i o n ( s e e page 55).
The Auditor General and s t a f f express a p p r e c i a t i o n t o the Adjutant
General, the d i r e c t o r of the Division of Emergency Services and members of
t h e i r s t a f f s f o r t h e i r cooperation and a s s i s t a n c e during the course of our
a u d i t .
SUNSET FACTORS
Eleven f a c t o r s were reviewed t o determine i f the Department of Emergency and
M i l i t a r y A f f a i r s , Division of Emergency Services should be continued or
terminated i n accordance with Arizona Revised S t a t u t e s ( A. R. S.) § § 41- 2351
through 41- 2379.
Objective and purpose i n e s t a b l i s h i n g the agency
The Division of Emergency Services ( ADES) was e s t a b l i s h e d i n 1971.
According t o the enabling l e g i s l a t i o n , t h e D i v i s i o n was created t o
". . . cope with the e f f e c t s of n a t u r a l , war- caused o r
other man- made d i s a s t e r s which endanger l i f e , property
and resources of t h i s s t a t e , and t o provide f o r t h e
h e a l t h , welfare and s a f e t y of the people of t h i s s t a t e
and f o r p r e s e r v a t i o n of property. . . ."
The Division is responsible f o r 1 ) e s t a b l i s h i n g , organizing and
maintaining d i s a s t e r preparedness and emergency programs, 2)
coordinating plans and programs with p o l i t i c a l s u b d i v i s i o n s , and 3)
developing an emergency response plan f o r fixed nuclear f a c i l i t i e s .
ADES' o b j e c t i v e of e s t a b l i s h i n g and maintaining a comprehensive
coordinated emergency management program is c o n s i s t e n t with l e g i s l a t i v e
i n t e n t . S p e c i f i c program a c t i v i t i e s a r e 1 ) hazard m i t i g a t i o n , i n c l u d i n g
hazard i d e n t i f i c a t i o n , f l o o d p l a i n management and community r e l o c a t i o n ;
2) emergency response plan development and t e s t i n g ; 3) r a d i o l o g i c a l
survey equipment maintenance and c a l i b r a t i o n ; and 4) t r a i n i n g and
education.
2. The e f f e c t i v e n e s s with which the agency has met i t s o b j e c t i v e and
purpose and the e f f i c i e n c y with which the agency has operated
We were unable t o adequately review ADES e f f e c t i v e n e s s i n meeting its
o b j e c t i v e s due t o extensive work required on expenditures, bidding and
personnel i r r e g u l a r i t i e s . Some uses o f funds and personnel, however,
a r e i n e f f i c i e n t and may adversely impact program e f f e c t i v e n e s s . Further
7
review is needed i n s e v e r a l other areas concerning e f f i c i e n c y and
e f f e c t i v e n e s s ( s e e page 55).
We i d e n t i f i e d the following conditions which may adversely impact both
e f f i c i e n c y and e f f e c t i v e n e s s :
e ADES may have incurred excessive c o s t s because numerous
c o n t r a c t s and p r o j e c t s were not bid competitively ( see page
3 7 ) .
0 Division personnel p r a c t i c e s a r e i n e f f i c i e n t and may
adversely impact program e f f e c t i v e n e s s . F i r s t , the Division
may be o v e r s t a f f e d . Second, personnel have been used
improperly. Some s t a f f performed d u t i e s 1 ) c l e a r l y
unrelated t o Division a c t i v i t i e s and 2) o u t s i d e of the
p o s i t i o n s f o r which they were h i r e d , r e s u l t i n g i n
u n n e c e s s a r i l y e x c e s s i v e p e r s o n a l s e r v i c e s c o s t s . This
misuse of resources may a l s o a f f e c t program operations.
Last, improper use of exempt p o s i t i o n s jeopardizes f u t u r e
Federal funding ( s e e page 45).
3. The extent t o which the agency has operated within t h e p u b l i c i n t e r e s t
Although the D i v i s i o n ' s programs a r e designed t o benefit the p u b l i c ,
some of t h e D i v i s i o n ' s a c t i o n s a r e not w i t h i n t h e public i n t e r e s t .
Further review i s needed i n s e v e r a l a r e a s .
The primary b e n e f i c i a r i e s of Division operations a r e the general
p u b l i c , and more s p e c i f i c a l l y , d i s a s t e r victims. The Division
responded t o 34 declared emergencies and contingencies between
July 1, 1477, and August 31, 1982. ADES has been a c t i v e l y involved i n
r e l o c a t i o n p r o j e c t s f o r s e v e r a l communities located i n hazardous
a r e a s . Additionally, plan development and t e s t i n g and various
educational a c t i v i t i e s b e n e f i t t h e public by providing f o r emergency
preparedness.
However, some Division f i n a n c i a l t r a n s a c t i o n s did not serve the public
i n t e r e s t . The former Director f a i l e d t o ensure t h a t funds were
expended or accounted f o r properly. In some i n s t a n c e s , expenditures
were not f o r v a l i d public purposes ( see page 13).
As noted i n the previous s e c t i o n , f u r t h e r review is needed t o
determine whether program goals have been met and t h e e x t e n t t o which
the programs provide b e n e f i t s t o the public.
4. The extent t o which r u l e s and r e g u l a t i o n s promulated by the agency a r e
c o n s i s t e n t with the l e g i s l a t i v e mandate
Division r u l e s and r e g u l a t i o n s a r e c o n s i s t e n t with s t a t u t o r y i n t e n t .
A. R. S. § 26- 306, subsection h and Executive Order 69- 4 r e q u i r e t h e
Division t o 1) promulgate r u l e s and r e g u l a t i o n s necessary f o r Division
operations and 2) p r e s c r i b e minimum standards f o r f a l l o u t p r o t e c t i o n .
Our review revealed t h a t ADES has promulgated these r u l e s and
r e g u l a t i o n s a s required.
5. The extent t o which the agency has encouraged input from the public
before promulgating its r u l e s and r e g u l a t i o n s and the extent t o which
i t has informed t h e p u b l i c a s t o i t s a c t i o n s and t h e i r expected impact
on the ~ u b l i c
Due t o time and s t a f f i n g c o n s t r a i n t s r e s u l t i n g from the extensive
review of other i s s u e s required, f u r t h e r review is needed t o address
t h i s f a c t o r .
6. The e x t e n t t o which the agency has been a b l e t o i n v e s t i g a t e and
resolve complaints t h a t are within its j u r i s d i c t i o n
This f a c t o r is not a p p l i c a b l e because the Division is n o t r e s p o n s i b l e
f o r complaint i n v e s t i g a t i o n or r e s o l u t i o n .
7. The extent t o which the Attorney General o r any o t h e r a p p l i c a b l e
agency of S t a t e government has t h e a u t h o r i t y t o prosecute a c t i o n s
under enabling l e g i s l a t i o n
Although ADES enabling l e g i s l a t i o n does not specify t h a t the Attorney
General has a u t h o r i t y t o prosecute, A. R. S . $ 41- 192, subsection A,
paragraph 2 and subsection B, paragraph 4 a u t h o r i z e t h e Attorney
General t o provide l e g a l s e r v i c e s t o S t a t e agencies.
8. The e x t e n t t o which the agency has addressed d e f i c i e n c i e s i n t h e
enabling s t a t u t e s which prevent it from f u l f i l l i n g i t s s t a t u t o r y
mandate
The Division sponsored o r supported four b i l l s during the past s i x
l e g i s l a t i v e s e s s i o n s :
Senate B i l l 1040, passed i n 1979, increased the amount of l i a b i l i t y
which could be incurred under a g u b e r n a t o r i a l d i s a s t e r d e c l a r a t i o n
from $ 750,000 t o $ 1,500,000. Senate B i l l 1349, passed i n 1980,
increased the l i m i t t o $ 2,500,000.
Two b i l l s introduced i n the EIouse i n 1977 f a i l e d . House B i l l 2008
would have allowed t h e u s e of S t a t e monies t o reimburse expenses
incurred i n combating menaces t o property of the Federal government.
House B i l l 2327 would have allowed the Governor t o 1) a u t h o r i z e d e b r i s
removal during emergencies, 2) provide temporary housing t o d i s a s t e r
v i c t i m s , and 3 ) o b l i g a t e the S t a t e t o p a r t i c i p a t e i n funding
i n d i v i d u a l and family d i s a s t e r r e l i e f g r a n t s .
9. The e x t e n t t o which changes a r e necessary i n the laws of t h e agency t o
adequately comply with the f a c t o r s l i s t e d i n the s u b s e c t i o n
S t a t u t o r y changes a r e needed t o provide c r i m i n a l p e n a l t i e s f o r
i n t e n t i o n a l v i o l a t i o n s of bidding requirements. Current S t a t e
s t a t u t e s d o n o t c o n t a i n c r i m i n a l p e n a l t i e s f o r v i o l a t i o l ~ s of bidding
requirements. Consequently, the S t a t e may have l i m i t e d recourse f o r
v i o l a t i o n s . Criminal p e n a l t i e s may a l s o s e r v e a s a d e t e r r e n t t o
prevent improper procurement p r a c t i c e s . The L e g i s l a t u r e should
consider e s t a b l i s h i n g c r i m i n a l p e n a l t i e s f o r i n t e n t i o n a l v i o l a t i o n s of
t h e b i d d i n g r e q u i r e m e n t s e s t a b l i s h e d by A. R. S. SS41- 1051 - e t . s- e q . ,
34- 201 and 41- 730 ( s e e page 44). F u r t h e r review is needed t o
determine i f changes are needed i n o t h e r o p e r a t i o n a l a r e a s .
10. The e x t e n t t o which t h e t e r m i n a t i o n of the agency would s i g n i f i c a n t l y
harm the public h e a l t h , s a f e t y o r w e l f a r e
Terminating the Division would a d v e r s e l y a f f e c t t h e p u b l i c h e a l t h ,
s a f e t y and w e l f a r e by fragmenting r e s p o n s i b i l i t y f o r emergency
responses. Since emergency s i t u a t i o n s r e q u i r e a r a p i d and
well- coordinated response, a c e n t r a l i z e d agency r e s p o n s i b l e f o r both
planning f o r emergencies and d i r e c t i n g emergency response is necessary.
11. The e x t e n t t o which the l e v e l of r e g u l a t i o n e x e r c i s e d by the agency is
a p p r o p r i a t e and whether less or more s t r i n g e n t l e v e l s of r e g u l a t i o n
would be a ~ ~ r o ~ r i a t e
This f a c t o r is not a p p l i c a b l e a s t h e Division is not a r e g u l a t o r y
agency.
FINDING I
THE DIVISION HAS PIISMANAGED AT LEAST $ 1.4 14ILLION I N STATE Ah9 FEDEML
FUNDS.
The Division of Emergency Services ( ADES) has i n a p p r o p r i a t e l y spent o r
t r a n s f e r r e d a t l e a s t $ 1.4 m i l l i o n i n S t a t e and Federal funds. As a
r e s u l t , t h e S t a t e may be required t o repay misspent Federal funds. This
extensive f i n a n c i a l mismanagement occurred because 1) the former d i r e c t or
of t h e D i v i s i o n f a i l e d t o e x e r c i s e h i s r e s p o n s i b i l i t y t o ensure t h a t funds
were properly expended and accounted f o r and 2) i n t e r n a l c o n t r o l and
accounting procedures were e i t h e r inadequate o r lacking.
S t a t u t o r v R e s t r i c t i o n s on Use
and Transfer of Emergency Funds
The D i v i s i o n r e c e i v e s funds from the following sources:
e Annual General Fund a p p r o p r i a t i o n s f o r r e g u l a r operating
a c t i v i t i e s and c a p i t a l o u t l a y s ;
o Special one- time a p p r o p r i a t i o n s of General Fund monies f o r
s p e c i f i c p r o j e c t s such a s providing d i r e c t emergency r e l i e f ,
e s t a b l i s h i n g a statewide emergency communications system and
developing emergency response plans;
0 General Fund monies f o r expenses incurred during declared
emergencies under the provisions of Arizona Revised S t a t u t e s
( A. R. S) $ 35- 192;
Federal grants- in- aid f o r s p e c i f i c p r o j e c t s ; and
0 Federal lump sum g r a n t s f o r various a c t i v i t i e s r e l a t e d t o r e g u l a r
operations.
ADES may use these funds only f o r the s p e c i f i c purposes f o r which they
were appropriated or granted, I n a September 11, 1981, opinion* the
Attorney General concluded t h a t
* Appendix I c o n t a i n s t h e opinion t e x t .
" An a p p r o p r i a t i o n is ' t h e s e t t i n g a s i d e from t h e p u b l i c
revenue of a c e r t a i n sum of money f o r a s p e c i f i e d
o b j e c t , i n such a mariner t h a t the executive o f f i c e r s of
the government are authorized t o use t h a t money, and no
more, f o r t h a t o b j e c t and no o t h e r ' . . . monies may be
expended only f o r work s p e c i f i e d by the terms of the
a p p r o p r i a t i o n and t h a t l e g i s l a t i v e a c t i o n w i l l be
necessary t o authorize an expenditure f o r any o t h e r
work." ( emphasis added)
According t o L e g i s l a t i v e Council, emergency r e l i e f monies a r e subject t o
t h i s r e s t r i c t i o n . Funds a l l o c a t e d f o r one emergency may not be used f o r
1) other emergencies, 2) items designed f o r prevention o r recovery from
f u t u r e emergencies, or 3) i t e m s not r e l a t e d t o any f u t u r e emergency. A
December 27, 1982, memorandum* s t a t e s :
" The s t a t u t o r y framework of A. R. S. $ 35- 192 c r e a t e s , i n
e f f e c t , a continuing a p p r o p r i a t i o n . . . which may be
expended f o r each contingency or emergency declared by
the governor. . . . As such, t h i s continuing
a p p r o p r i a t i o n i s s u b j e c t t o the l i m i t a t i o n s prescribed
by Arizona law. Appropriated monies may be expended
only f o r the purposes and items s p e c i f i e d by the terms
of the appropriation."
". . . The language used i n t h i s s e c t i o n [ A. R. S.
535- 1923 evidences an i n t e n t t h a t monies a l l o c a t e d
pursuant t o each emergency d e c l a r a t i o n may be used only
f o r expenses incurred i n r e l a t i o n t o t h a t p a r t i c u l a r
emergency and for no other purpose unless authorized by
- law." ( emphasis added)
S i m i l a r l y , Federal grant monies may be used only f o r s p e c i f i e d purposes.
The U. S. Office of Management and Budget ( OMB) has developed g u i d e l i n e s
i d e n t i f y i n g allowable c o s t s . I n g e n e r a l , c o s t s a r e allowable i f they
1) a r e necessary and reasonable f o r grant program a d m i n i s t r a t i o n ,
2) provide a benefit t o the grant program, and 3 ) a r e n o t g e n e r a l
expenses r e l a t e d t o o v e r a l l S t a t e government o r agency r e s p o n s i b i l i t i e s .
F u r t h e r , t h e grantor agency must approve c a p i t a l o u t l a y expenditures.
* Appendix I1 c o n t a i n s t h e opinion t e x t .
Because appropriations and g r a n t s may be spent only f o r s p e c i f i c purposes,
t r a n s f e r s and subsequent expenditures of these funds must a l s o be r e l a t e d
t o the a p p r o p r i a t i o n o r g r a n t . For example, funds a v a i l a b l e f o r a
declared emergency may be t r a n s f e r r e d t o an account e s t a b l i s h e d f o r a
s p e c i f i c State- f unded p r o j e c t i f t h e p r o j e c t is r e l a t e d t o t h e declared
emergency. S i m i l a r l y , S t a t e and Federal funds may a l s o be t r a n s f e r r e d t o
j o i n t c l e a r i n g accounts when matching is required.
Scope of Audit
To determine i f funds were managed i n accordance with s t a t u t o r y
requirements and r e s t r i c t i o n s , we reviewed both expenditures and t r a n s f e r s
i n t h r e e accounts and r e l a t e d t r a n s a c t i o n s i n other accounts. A s e p a r a t e
account is e s t a b l i s h e d f o r each budget c l a s s i f i c a t i o n , program, p r o j e c t
and declared emergency. ADES used 49 such accounts during f i s c a l years
1977- 78 through 1981- 82. The D i v i s i o n h a s a l s o e s t a b l i s h e d nine j o i n t
Federal- State c l e a r i n g accounts. The three accounts s e l e c t e d f o r d e t a i l e d
review were :
a The State- funded Santa Cruz County flood emergency account,
a The State- funded Globe asbestos emergency account, and
a A Federal- funded p r o j e c t t o upgrade s a f e t y f e a t u r e s i n mobile
homes used t o house flood victims.
We e v a l u a t e d e x p e n d i t u r e s t o determine whether the item or s e r v i c e
purchased was proper, t h a t is, r e l a t e d t o the s p e c i f i c purpose f o r which
the funds were appropriated o r granted. Transfers were reviewed t o
determine whether 1 ) t h e u l t i m a t e d i s p o s i t i o n ( expenditure) of
t r a n s f e r r e d funds was r e l a t e d t o t h e grant o r a p p r o p r i a t i o n and 2 ) t h e
documentation was s u f f i c i e n t .
However, due t o d e f i c i e n c i e s i n the accounting records, we were unable t o
review 1) most expenditures made from funds t r a n s f e r r e d out of these
accounts* or 2) the propriety of some payroll- related expenditures.
ADES Plismananed S t a t e -- "
and Federal Funds
ADES has i n a p p r o p r i a t e l y spent or improperly t r a n s f e r r e d at l e a s t $ 1.4
m i l l i o n i n S t a t e and Federal funds. We i d e n t i f i e d $ 438,204 i n
i n a p p r o p r i a t e expenditures and t r a n s f e r s i n the t h r e e accounts we
reviewed. An a d d i t i o n a l $ 925,215 i n i n a p p r o p r i a t e expenditures and
t r a n s f e r s were found i n other accounts. The timing of these expenditures
and t r a n s f e r s suggests a d e l i b e r a t e attempt t o circumvent the
appropriations process. Annual r e p o r t s submitted t o the L e g i s l a t u r e do
not r e f l e c t the purposes and nature of a l l expenditures.
W e found $ 438,204 i n inappropriate expenditures and t r a n s f e r s i n the Santa
Cruz County flood emergency, Globe asbestos emergency and t r a i l e r upgrade
p r o j e c t accounts. The o r i g i n a l purposes of t h e s e funds a r e discussed
below and the subsequently inappropriate expenditures and t r a n s f e r s are
d e t a i l e d i n Table 3. 4
* In most cases, we were unable t o i d e n t i f y s p e c i f i c expenditures made
with t r a n s f e r r e d funds because of d e f i c i e n c i e s i n the accounting
records. These d e f i c i e n c i e s a r e discussed on page 33.
TABLE 3
SUMPIARY 3F DISPOSITION OF FUNDS FOR
SANTA CRUZ COUNTY FLOOD EMERGENCY ACCOUNT,
GLOBE ASBESTOS EMERGENCY ACCOUNT AND
TRAILER UPGRADE GRANT ACCOUNT FUNDS REVIEWED
Total
I n a p p r o p r i a t e T o t a l
Inappropriate Expenditures Funds
Account Expenditures Transfers and Transfers Reviewed
Santa Cruz County flood
emergency account $ 26,914 $ 50,341 $ 77,255 $ 100,000
Globe asbestos emergency
account 6,287 63,635 69,922 237,692
T r a i l e r upgrade grant account 206,231 84,796 291,027 436,646
Total
Santa Cruz County Flood Emergency Account - On August 21, 1980, t h e Governor
declared an emergency t o a s s i s t the City o f Nogales and Santa Cruz County with
c o s t s incurred during an August 13th flood. The emergency was t e r m i n a t e d 1 2
months l a t e r , on August 31, 1981.
ADES misspent o r improperly t r a n s f e r r e d over 75 percent of a v a i l a b l e funds.
Sources and d i s p o s i t i o n of funds a r e shown i n Table 4.
TABLE 4
SOURCES AND DISPOSITION OF FUNDS FOR
SANTA CRUZ COUNTY FLOOD EMERGENCY ACCOUNT
Sources of funds:
General Fund monies
Disposition of funds:
Inappropriate expenditures
Transfers t o other accounts
Appropriate expenditures
Total uses of funds
The former d i r e c t o r spent $ 10,000 of funds s p e c i f i c a l l y designated f o r Santa
Cruz County to host a conference f o r a p r i v a t e p r o f e s s i o n a l a s s o c i a t i o n of
which he was p r e s i d e n t - e l e c t . A d d i t i o n a l conference c o s t s t o t a l i n g over
$ 4,500 were paid from other accounts, including an account e s t a b l i s h e d f o r
d i r e c t emergency r e l i e f f o r f l o o d v i c t i m s . A portion of t h i s $ 14,500 was
used f o r such items a s miniature f l a g s , greens f e e s f o r a v i s i t i n g guest,
county emergency d i r e c t o r s ' r e g i s t r a t i o n fees and a $ 4,500 bar b i l l . 0
The Division paid a t l e a s t $ 1,396 from the Santa Cruz flood emergency
account t o r e p a i r and r e s t o r e a Department of P u b l i c S a f e t y ( DPS)
airplane." In a d d i t i o n t o paying f o r these r e p a i r s , ADES paid f o r use of 4
the plane. The Division has paid DPS hourly usage charges t o t a l i n g a t l e a s t
$ 1,566. The plane could not have been used during the Santa Cruz emergency
because it was not airworthy at the time. Further, the expenditures were
improper i n t h a t emergency funds may not be used f o r items r e l a t e d t o f u t u r e
emergency s i t u a t i o n s .
FIGURE 1
DPS AIRPLANE REPAIRED WITH SANTA CRUZ COUNTY FLOOD EMERGENCY AND OTHER FUNDS
* Additional p r o j e c t expenses t o t a l i n g $ 28,027 were paid from other
accounts ( see page 26).
The agency i n a p p r o p r i a t e l y spent $ 7,100 from the Santa Cruz flood account
for van conversion p r o j e c t expenses. Additional conversion p r o j e c t c o s t s
were paid from accounts e s t a b l i s h e d f o r the Globe a s b e s t o s emergency ( see
page 22), d i r e c t r e l i e f t o flood victims and two f e d e r a l l y funded
temporary housing p r o j e c t s . Although n e i t h e r S t a t e nor Federal funds were
authorized f o r t h i s purpose, ADES spent $ 91,742 on t h e s e p r o j e c t s . *
FIGURE 2
ADES MOBILE COMI9UNICATIONS VAN
PURCHASED WITH SANTA CRUZ COUNTY FLOOD EMERGENCY AND OTHER FUNDS
* ADES purchased four vans and converted them t o mobile communications
u n i t s . This project w i l l c o s t t h e S t a t e a t l e a s t $ 177,000. The f i r s t
two vehicles were purchased and converted i n 1979 and 1980, before S t a t e
or Federal funds were a v a i l a b l e , at a c o s t of $ 91,742. ADES received a
$ 45,000 Federal grant i n 1982 f o r equipment for the t h i r d and f o u r t h vans.
FIGURE 3
INTERIOR OF ADES MOBILE COMMUNICATIONS VAN
Other i n a p p r o p r i a t e expenditures from t h i s emergency account include
$ 1,341 f o r word processor s u p p l i e s which were ordinary operating
expenses r a t h e r than c o s t s r e l a t e d t o a s p e c i f i c emergency and
a $ 1,800 f o r a county emergency d i r e c t o r ' s expenses. The Division
paid these expenses r e g u l a r l y t o match t h e county's monthly
expense payments . The same i n d i v i d u a l received t r a v e l
reimbursements from another emergency account ( see page 22).
In a d d i t i o n t o i n a p p r o p r i a t e expenditures of $ 26,914, ADES improperly
t r a n s f e r r e d over half of the a v a i l a b l e funds t o s p e c i a l revenue c l e a r i n g
accounts. According t o the former accounting o f f i c e r , the former d i r e c t o r
made the t r a n s f e r s t o meet cash flow needs and t r a n s f e r s and subsequent
expenditures were not r e l a t e d t o the Santa Cruz flood.
Globe Asbestos Emergency Account - On January 16, 1980, t h e Governor
declared an emergency i n Gila County because Department of Health Services
o f f i c i a l s believed asbestos t a i l i n g s c r e a t e d a h e a l t h hazard t o Globe
r e s i d e n t s . The emergency was terminated s i x months l a t e r on June 2,
1980. During the emergency the Division temporarily r e l o c a t e d r e s i d e n t s
while t h e i r homes were p r o f e s s i o n a l l y cleaned and the surrounding a r e a
covered with t o p s o i l . This work was s u b s t a n t i a l l y completed six months
af t e r the emergency d e c l a r a t i o n .
Of $ 237,692 received from S t a t e and F e d e r a l s o u r c e s f o r t h i s emergency,
$ 69,922 was spent o r t r a n s f e r r e d i n a p p r o p r i a t e l y . Sources and d i s p o s i t i o n
of funds are shown i n Table 5.
TABLE 5
SOURCES AND DISPOSITION OF FUNDS FOR
GLOBE ASBESTOS EMERGENCY ACCOUNT
Sources of funds:
General Fund monies
Federal reimbursements
Total a v a i l a b l e funds
Disposition of funds:
I n a p p r o p r i a t e e x p e n d i t u r e s
Transfers t o other accounts
Appropriate expenditures
Reverted t o General Fund
Unknown*
Total uses of funds
* Agency records do not agree with Department of Administration - Finance
Division ( DOA- Finance) records. ADES ledgers r e f l e c t $ 237,456 i n
t r a n s f e r s and expenditures, $ 286 l e s s than t o t a l r e c e i p t s . Audit s t a f f
did not r e c o n c i l e the d i f f e r e n c e .
Inappropriate expenses included $ 3,275 f o r communications equipment f o r
the van conversion p r o j e c t ( s e e page 1 9 ) , $ 1,398 f o r f u r n i s h i n g s ,
including p a t i o c h a i r s and t a b l e s , and $ 865 f o r c a t e r i n g a t a county
emergency d i r e c t o r ' s con£ erence.
I n a d d i t i o n , ADES improperly paid from the Globe asbestos account t r a v e l
claims t o t a l i n g $ 298 t o non- State employees including t h e Santa Cruz
County emergency d i r e c t o r . * After DOA- Finance n o t i f i e d AGES t h a t
non- State employees were not e l i g i b l e f o r t r a v e l reimbursement, the
Division began paying these expenses as p r o f e s s i o n a l s e r v i c e s r a t h e r than
t r a v e l claims.
In a d d i t i o n t o i n a p p r o p r i a t e expenditures, t h e Division improperly
t r a n s f e r r e d 27 percent of a v a i l a b l e funds. These funds were t r a n s f e r r e d
t o j o i n t Federal- State c l e a r i n g accounts f o r operating and t r a v e l
expenses, an account f o r d i r e c t r e l i e f t o flood victims and an account f o r
a Federal temporary housing p r o j e c t . As i n t h e case of t h e Santa Cruz
County flood emergency account, the former d i r e c t o r made the t r a n s f e r s t o
meet cash flow needs i n other accounts. I n most cases, subsequent
expenditures a r e not r e l a t e d t o the o r i g i n a l emergency. For example,
$ 6,500 t r a n s f e r r e d from the Globe asbestos emergency account t o t h e
account f o r d i r e c t emergency r e l i e f was used a s p a r t i a l payment f o r a van
used i n the conversion p r o j e c t .
T r a i l e r Upgrade Grant Account - In November 1979, ADES received a $ 400,000
Federal grant t o upgrade s a f e t y f e a t u r e s on mobile homes used t o house
flood v i c t i m s . A d d i t i o n a l funds, including some S t a t e monies, were a
t r a n s f e r r e d i n t o the account from various sources. ADES inappropri. ately
spent or t r a n s f e r r e d a t l e a s t $ 291,027 of these funds. Sources and
d i s p o s i t i o n of funds a r e shown i n Table 6.
* We i d e n t i f i e d o t h e r i n a p p r o p r i a t e t r a v e l claims t o t a l i n g $ 184 paid
from the t r a i n i n g and education account ( see page 26).
TABLE 6
SOURCES AND DISPOSITION OF FUNDS FOR TRAILER UPGRADE GRANT ACCOUNT
Sources of funds:
F e d e r a l g r a n t
Transfers from remodeling grant
Transfers from j o i n t Federal- State
operating expense account*
Total funds a v a i l a b l e
Disposition of funds reviewed:
Inappropriate expenditures
Transfers to other accounts
Appropriate expenditures
Total uses of funds
* At l e a s t $ 35,375 i s S t a t e General Fund monies and a t l e a s t $ 6,847 is
Federal monies. The sources of the remaining $ 14,835 cannot be
determined.
** Total funds a v a i l a b l e does not a g r e e w i t h t o t a l uses because we did not
review $ 177,671 i n expenditures. ADES received a n o t h e r F e d e r a l grant i n
February 1980 t o provide temporary housing t o flood victims. Before
receiving these funds, ADES e s t a b l i s h e d a s u b s i d i a r y account within the
upgrade grant account. Temporary housing expenses t o t a l i n g $ 135,348
were paid from the s u b s i d i a r y account. Numerous temporary housing
expenditures were a l s o made from t h e p r i n c i p a l account. The t r a n s f e r s
were made t o reimburse the upgrade account f o r temporary housicg
expenditures paid from both the s u b s i d i a r y and p r i n c i p a l accounts. We
did not review temporary housing expenditures made from the s u b s i d i a r y
account. Further, due t o d e f i c i e n c i e s i n the time- reporting system, we
were unable t o review p a y r o l l - r e l a t e d expenses t o t a l i n g $ 42,323.
The Division misspent over $ 200,000, o r 34 percent of a v a i l a b l e funds.
-
Almost $ 90,000 of t h i s was spent on items c l e a r l y - related t o t h i s o r any
other Federal g r a n t . A d d i t i o n a l e x p e n d i t u r e s t o t a l i n g over $ 116,800 may be
a p p l i c a b l e t o o t h e r Federal g r a n t s . However, such expenditures a r e
i n a p p r o p r i a t e under the t r a i l e r upgrade g r a n t p r o v i s i o n s .
ADES improperly used $ 70,550 of these funds and $ 200,074 from a j o i n t
c l e a r i n g account to c o n s t r u c t a mess h a l l and o f f i c e complex. ADES agreed
t o c o n s t r u c t a mess h a l l f o r the National Guard i n exchange f o r use of an
empty National Guard warehouse. The warehouse was subsequently converted t o
an ADES o f f i c e and s t o r a g e complex. Neither S t a t e nor Federal money was
authorized f o r the projects.*
FIGURE 4
NATIONAL GUARD MESS HALL CONSTRUCTED WITH
TRAILER UPGRADE AND OTHER FUNDS
* A t l e a s t one claim r e l a t e d t o t h e p r o j e c t may have been f a l s i f i e d . The
c o n t r a c t o r submitted a $ 57,000 claim f o r " Balance owed f o r t r a i l e r
upgrade." Available evidence s t r o n g l y suggests t h a t some labor and a
material c o s t s were f o r the mess h a l l construction.
ADES made other expenditures unrelated to any Federal grant:
$ 4,600 for microcomputer equipment and programming s e r v i c e s ,
$ 4,173 f o r communications equipment and van conversion project
c o s t s ( see page 1 9 ) ,
$ 8,269 f o r o f f i c e equipment and remodeling,
$ 2,425 for automotive supplies and f u e l ,
$ 580 f o r u t i l i t i e s and t r a s h s e r v i c e s , and
e $ 158 for s o f t drinks.
While unrelated t o the t r a i l e r upgrade p r o j e c t , $ 116,851 i n expenditures
from the upgrade account may be r e l a t e d t o a s i m i l a r f e d e r a l l y funded
grant. Even i f s o r e l a t e d , they a r e improper. Moreover, our l i m i t e d review
i n d i c a t e s t h a t ADES may have a c t u a l l y used the funds f o r the warehouse and
mess h a l l projects. Questionable expenditures include
8 $ 11,204 f o r f u r n i s h i n g s and carpet-- ADES purchased household items
such a s a r e c l i n e r , beds and d i n e t t e sets-- and
$ 6,189 t o reimburse the p e t t y cash fund f o r purchases of drapes and
other items.
Inappropriate Expenditures and Transfers from Other Accounts - ADES a l s o
made a t l e a s t $ 925,200 i n i n a p p r o p r i a t e expenditures and t r a n s f e r s from
other accounts. As previously discussed, ADES spent a t l e a s t $ 243,597 f o r
the conference and f o r the warehouse, mess h a l l , van conversion and plane
repair p r o j e c t s from other accounts:
8 $ 4,548 i n c o s t s f o r the p r o f e s s i o n a l a s s o c i a t i o n conference was
paid from the account f o r d i r e c t emergency r e l i e f and j o i n t
accounts for c o n t r a c t s and operating expenses.
Mess h a l l and warehouse conversion p r o j e c t expenses t o t a l i n g
$ 200,074 were paid from a j o i n t account f o r operating expenses.
e ADES spent $ 10,765 f o r the van conversion p r o j e c t from the account
f o r d i r e c t emergency r e l i e f and a Federal grant account.
DPS plane r e p a i r and r e s t o r a t i o n c o s t s of $ 28,027 were paid from
the accounts f o r d i r e c t emergency r e l i e f , the December 1978 flood
emergency and operating expenses.
0 Improper t r a v e l claims t o t a l i n g $ 184 were paid from the t r a i n i n g
and education account.
We a l s o i d e n t i f i e d the following i n a p p r o p r i a t e expenditures:
e $ 282 was paid f o r a c o n s u l t a n t ' s room charges and meals during a
conference a t the Arizona Biltmore. The consultant appears t o have
had no formal r o l e i n the conference.
The Division provided alcoholic beverages during another conference
funded from the t r a i n i n g and education account. These c o s t s
t o t a l e d at l e a s t $ 240.
e At l e a s t $ 13,768 was paid from emergency accounts t o provide county
emergency operations c e n t e r s with radio equipment. In one case,
the county emergency d i r e c t o r purchased equipment costing $ 5,903
and sent the b i l l t o the Division.
Further, the Division's i n t e r n a l a u d i t o r r e c e n t l y i d e n t i f i e d questionable
expenditures and t r a n s f e r s t o t a l i n g $ 667,298 i n e i g h t o t h e r accounts f o r
emergencies and contingencies.* These questionable expenditures and
t r a n s f e r s represent almost one- fifth of the reported c o s t s . In one case,
questionable c o s t s c o n s t i t u t e 95 percent of claimed c o s t s . A summary of the
a u d i t o r ' s findings is presented i n Table 7.
* Our limited review i n d i c a t e s t h a t the i n t e r n a l a u d i t o r ' s a n a l y s i s is
r e l i a b l e . The i n t e r n a l a u d i t o r ' s questioned c o s t s f o r the two accounts
we reviewed are approximately the same as i n a p p r o p r i a t e expenditures and
t r a n s f e r s we i d e n t i f i e d . The d i f f e r e n c e s between our t o t a l s and those
of the i n t e r n a l auditor a r e immaterial. The i n t e r n a l a u d i t o r ' s r o l e is
discussed f u r t h e r on page 35.
TABLE 7
SIJFlMARY OF ADES INTERNAL AUDITS OF
EMERGENCY FUND ACCOUNTS
Account
Search and rescue:
1981
1982
Pinal, Pima and Santa Cruz
Counties floods
March 1978 statewide floods
Fire contingency:
1981
1982
December 1978 statewide
floods
Yavapai County grasshopper
infestation
Total
Claimed Questioned
Cost Cost
Allowable
Cost
Thus, the transfers in the accounts we reviewed are not isolated cases but
rather represent typical financial practices within the Division. ADES
has consistently transferred significant amounts of funds from
emergency- related accounts. During calendar years 1978 through 1981, over
$ 900,000 of emergency funds were transferred to accounts established for
other purposes.
Timing of Transfers and Inappropriate Expenditures - The timing of
inappropriate expenditures and transfers and the inadequacy of reports
filed with the Legislature ( see page 30) suggest a deliberate attempt to
circumvent the appropriations process. Declared emergencies are
terminated by the Governor upon the Director's recommendation. At
termination, all monies remaining in the account revert to the General
Fund. However, in the two emergency- related accounts that we reviewed, a
significant amount of funds was transferred or spent for unauthorized
purposes after the immediate danger had ended and all expenses related to
the emergency had been paid.
In the Santa Cruz County flood emergency, funds were appropriated t o
assist the City of Nogales and Santa Cruz County with flood damage r e p a i r
expenses. The p o l i t i c a l s u b d i v i s i o n s i n c u r r e d expenses which were
reimbursed with S t a t e funds. ADES made the f i n a l reimbursement t o the
l o c a l i t i e s i n November 1980. However, the emergency was not terminated
u n t i l August 1981, almost nine months l a t e r . Between the f i n a l
reimbursement and the termination, ADES t r a n s f e r r e d or spent
inappropriately a l l remaining funds t o t a l i n g $ 65,409. The timing of
expenditures and t r a n s f e r s is depicted i n Figure 5.
FIGURE 5
TIPIING OF EXPENDITURES AND TRANSFERS FROM
THE SANTA CRUZ COUNTY FLOOD EMERGENCY ACCOUNT
APPROPRIATE
EXPENDITURES
EEERGENCY SUBSTANTIALLY
CONTAILED
X OF FUNDS AVAILABLE 1
INAPPROPRIATE
EXPENDITURES
($ 100,000) 30
20 -
10 -
20 -
10 .
MONTkIS AFTER
EMERGENCY DECLARATION
f
I
2 1% I
I
1
1
t
t
1.4; 1, .3%
I
I 20% TRANSFERS
9% 1 2%
I I
I
1
10% I I
1 7%
I 2%
I r
4
A similar pattern occurs i n the timing of expenditures and t r a n s f e r s from
the Globe asbestos emergency account. The work required t o clean the
contaminated area was s u b s t a n t i a l l y completed by June 1980. The Governor
terminated the emergency i n June 1980, but did not require ADES t o revert
funds u n t i l January 1981. Between June 1980 and January 1981, ADES
t r a n s f e r r e d or spent i n a p p r o p r i a t e l y 26 percent of t h e clean- up p r o j e c t
funds. These t r a n s f e r s and expenditures are shown i n Figure 6.
FIGURE 6
TIMING OF EXPENDITURES AND TRANSFERS FROM THE
GLOBE ASBESTOS EMERGENCY ACCOUNT
EEEBCENCY SUBSTANTIALLY
CONTAIXED
% OF FLTDS AVAILABLE
( $ ? 3 i , 6 9 2 )
I
I
1
I APPROPRIATE
t EXPENDITURES
I
REVERSION
TO GENERAL FUND
42
30 .)
I
I
I 24%
TRANSFERS 20
10.
I
I
I
I
I
INAPPROPRIATE
I EXPENDITURES
1
I
10 I - - - . ; : r *
I
I
I
- 602 .60% .06x 1.4%
-*-
1 2 3 4 5 6 1 7 8 9 10 11 12
I MOPJTtlS AFTER
EMERCEhCY DECLARATION
I
I I
I
I
1
3%
.06% J
t
t 1
Inadequate Reports - Annual r e p o r t s submitted t o the L e g i s l a t u r e do not
provide adequate information. These r e p o r t s , prepared and signed by the ,
former emergency services d i r e c t o r , do not provide s u f f i c i e n t d e t a i l s on
the nature and purposes of expenditures.
A. R. S. $ 35- 192, subsection E r e q u i r e s the Director of Emergency Services
t o report annually t o t h e L e g i s l a t u r e t h e a c t i o n s of the emergency
council. However, the s t a t u t e s do n o t p r e s c r i b e the degree of d e t a i l
which these r e p o r t s should contain.
As a r e s u l t , the r e p o r t s list only a general purpose without itemizing or
grouping expenditures. For example, the 1981 report shows as follows: a
" Flooding-- Santa Cruz County and City of Nogales
( Governor's Proclamation of August 21, 1980).
Reimbursement t o County and City f o r r e p a i r of flood
damaged f a c i l i t i e s and a s s o c i a t e d c o s t s . "
The nature of such items as " associated costs" a r e not indicated. Without
a d d i t i o n a l d e t a i l , the L e g i s l a t u r e would be unaware from t h i s r e p o r t t h a t
the p r i v a t e a s s o c i a t i o n conference cost was funded from t h i s account.
Federal Agencies Play Require
Arizona t o Repay Funds and
Other S t a t e Agencies'
Overations May Be Affected
Because ADES mismanaged Federal funds, the S t a t e may be required t o repay
a s i g n i f i c a n t amount of Federal grant monies. Under e x i s t i n g r e g u l a t i o n s ,
Federal grantor agencies may disallow and request repayment of both
1) improper expenditures made d i r e c t l y from Federal grant accounts and
2) unsupported t r a n s f e r s and expenditures.
We i d e n t i f i e d a t l e a s t $ 165,805 i n such expenditures and t r a n s f e r s i n the
Federal grant account f o r t r a i l e r upgrades. ADES spent $ 38,686 i n Federal
funds f o r the warehouse and c a f e t e r i a p r o j e c t s and other items c l e a r l y
unrelated t o the t r a i l e r upgrade grant. The Division may be unable t o
support e i t h e r t r a n s f e r s or personal s e r v i c e s payments t o t a l l i n g $ 127,119
due t o d e f i c i e n c i e s i n the accounting and time- reporting systems. The
S t a t e ' s p o t e n t i a l l i a b i l i t y f o r t h i s account alone could exceed $ 400,000 i f
Federal agencies a l s o disallow expenditures from the t r a i l e r upgrade account
made f o r another f e d e r a l l y funded project." A summary of the S t a t e ' s
p o t e n t i a l l i a b i l i t y r e s u l t i n g ' from mismanagement of the t r a i l e r upgrade
grant account is presented i n Table 8.
TABLE 8
POTENTIAL STATE LIABILITY RESULTING FROM MISMANAGEMENT OF
FEDERAL FUNDS I N THE TRAILER UPGRADE GRANT ACCOUNT
Expenditures unrelated t o any
Federal grant
Unsupported transactions:
Transfers
Personal services expense
Expenditures f o r f e d e r a l l y funded
remodeling project:
P r i n c i p a l account
Subsidiary account
p o t e n t i a l l i a b i l i t y from
t r a i l e r upgrade grant account
Further, Federal a u d i t o r s have i d e n t i f i e d a s i g n i f i c a n t amount of improper
expenditures i n several other accounts. The a c t u a l amount of funds which
may require repayment depends upon the outcome of the Federal a u d i t s
c u r r e n t l y i n progress.**
* These expenditures were made before funds f o r the other p r o j e c t were
received ( see page 23). Although the t r a i l e r upgrade grant account was
l a t e r reimbursed f o r the expenditures, expenditures made before funds
a r e a v a i l a b l e may be disallowed, according t o Federal a u d i t o r s . ** On March 18, 1983, the Federal Emergency Management Agency ( FEMA) issued
a b i l l of c o l l e c t i o n t o recover a $ 225,615 d u p l i c a t e payment f o r a
temporary housing p r o j e c t . FEMA a u d i t o r s a r e c u r r e n t l y reviewing
numerous other accounts.
Other S t a t e agencies and some l o c a l governments could l o s e a s i g n i f i c a n t
amount of funds i f repayment is required. Public Law 93- 288 allows the
Federal government t o withhold d i s a s t e r - r e l a t e d monies granted t o any
p o l i t i c a l subdivision i f an agency misspends funds. Therefore, i f ADES does *
not have s u f f i c i e n t funds f o r repayment, g r a n t s t o S t a t e agencies and various
county and c i t y governments could be withheld.
In addition t o possible withholding of Federal funds, f i n a n c i a l mismanagement
can adversely impact monies held i n t r u s t f o r other agencies i f these funds
a r e not a v a i l a b l e when needed. For example, the D i v i s i o n h a s n o t f u l f i l l e d
its f i d u c i a r y r e s p o n s i b i l i t i e s i n a t l e a s t one instance. ADES a d m i n i s t e r s a n
account e s t a b l i s h e d f o r funds the Land Department may require f o r f i r e ( I
suppression expenses. During calendar years 1980 and 1981, ADES
i n a p p r o p r i a t e l y t r a n s f e r r e d over $ 200,000, or 29 percent of appropriated
funds, t o accounts e s t a b l i s h e d f o r its own i n t e r n a l operations and t o various
j o i n t c l e a r i n g accounts. Only 4 percent of a l l t r a n s f e r s from the account a
were proper.* As a r e s u l t , when the Land Department received a U. S. Forest
Service b i l l f o r the S t a t e ' s portion of j o i n t f i r e suppression a c t i v i t i e s ,
the account balance was $ 133,202 l e s s than the required payment.
Causes of Mismanagement
This extensive mismanagement of Division funds appears t o have occurred f o r
two reasons. F i r s t , the former d i r e c t o r of the Division f a i l e d t o ensure
t h a t funds were properly expended and accounted f o r . Second, Division ( I
i n t e r n a l c o n t r o l s and accounting procedures were e i t h e r inadequate or lacking.
Failure of Director - The former d i r e c t o r f a i l e d t o f u l f i l l h i s duty t o
safeguard S t a t e monies. As a d m i n i s t r a t i v e head of the Division, the d i r e c t o r 4
is responsible f o r expending funds i n a manner c o n s i s t e n t with S t a t e and
Federal laws and regulations. However, our review i n d i c a t e s t h a t t h e former
d i r e c t o r was d i r e c t l y responsible f o r a t l e a s t a portion of the i n a p p r o p r i a t e
expenditures and t r a n s f e r s we i d e n t i f i e d . According t o the former accounting a
o f f i c e r , the former d i r e c t o r himself ordered many of these payments and
t r a n s f e r s .
* We did not determine whether expenditures t o t a l i n g $ 269,171 were
appropriate.
Inadequate I n t e r n a l Control and Accounting - Division i n t e r n a l c o n t r o l s and
accounting procedures a r e e i t h e r inadequate or completely lacking. As a
r e s u l t , the propriety of a s i g n i f i c a n t number of expenditures cannot be
determined.
Financial t r a n s a c t i o n s must be documented adequately according t o S t a t e and
Federal laws and r e g u l a t i o n s , including the D i v i s i o n ' s own a d m i n i s t r a t i v e
r u l e s . Accounting records must i d e n t i f y the sources and uses of funds,
accurately r e f l e c t the f i n a n c i a l r e s u l t s of the funded program and otherwise
be acceptable f o r a u d i t purposes. Further, t r a n s f e r s must be explained and
j u s t i f i e d .
In our opinion, ADES has not met these requirements. The D i v i s i o n h a s
commingled funds and o b l i t e r a t e d a u d i t t r a i l s t o the extent t h a t i d e n t i f y i n g
the ultimate uses of some monies may be impossible. Funds a r e t r a n s f e r r e d
frequently between accounts. In most cases, t r a n s f e r documents contain only
a general d e s c r i p t i o n such a s " payroll" o r " operating expenses." The
persons t o be paid, the amount t o be paid, and i n the case of operating
expenses, t h e s p e c i f i c item or s e r v i c e t o be purchased is not d e t a i l e d . I n
some cases, the documents contain no explanation o r j u s t i f i c a t i o n at a l l .
When funds a r e t r a n s f e r r e d t o other accounts, e s p e c i a l l y t o j o i n t c l e a r i n g
accounts, without s u f f i c i e n t explanation, the funds l o s e t h e i r i d e n t i t i e s .
It is v i r t u a l l y impossible t o determine the sources of funds f o r s p e c i f i c
expenditures made from these accounts.
The following example i l l u s t r a t e s the problem. In October 1980, an account
f o r operating expenses funded from S t a t e and F e d e r a l s o u r c e s was
e s t a b l i s h e d . T r a n s f e r s t o and from t h i s account f o r the f i r s t two months
a r e shown i n Figure 7.
FIGURE 7
TRANSFERS AND EXPENDITURES FROM THE JOINT CLEARING ACCOUNT
FOR OPEUTING EXPENSES DURING OCTOBER AND NOVEMBER 1980
TRANSFERS FROX TRANSFERS TO
I General Fucd
Budget A p p r o p r i a t i o n 1 $ 15,850 h
F e d e r a l
Grant- in- Aid Accounts
$ 45,000
I
General Fund
Emergency
A p p r o p r i a t i o n s
$ 192,431
I
-
C o n t r a c t E x p e n d i t u r e s
J o i n t C l e a r i n g Account
$ 55,000
L Operating Expenses
1
General Fund
S p e c i a l A p p r o p r i a t i o n s -
T r a i n i n g and
Education
Account
$ 299,181 T r a n s f e r i n
$ 65,000 T r a n s f e r out
1 $ 45,900 1 C l e a r i n g Account
$ l0,000
-
These t r a n s f e r s do not i n d i c a t e a s p e c i f i c purpose. Therefore, it is
impossible t o determine whether the purchase of radio equipment, f o r
example, was made with funds o r i g i n a l l y designated f o r r e g u l a r p a y r o l l
from the annual appropriation, a s p e c i f i c declared emergency or a s p e c i f i c
Federal program such a s the t r a i l e r upgrade p r o j e c t .
Retransfers f u r t h e r t a n g l e t h e a u d i t t r a i l . As previously noted, funds
lose t h e i r i d e n t i t i e s when t r a n s f e r r e d t o j o i n t c l e a r i n g accounts. They
a r e , i n e f f e c t , mixed with a l l o t h e r funds i n the account. I n some
instances, " mixed" funds from one j o i n t c l e a r i n g account a r e t r a n s f e r r e d
t o o t h e r c l e a r i n g accounts containing " mixed" funds. Funds from the
second j o i n t clearing account a r e then t r a n s f e r r e d back t o t h e f i r s t
c l e a r i n g account.
The Division's i n t e r n a l a u d i t p o s i t i o n does n o t s e r v e as a c o n t r o l
mechanism f o r expenditures of S t a t e funds because the a u d i t o r does not
r e g u l a r l y review emergency accounts. . The p o s i t i o n , funded with S t a t e
emergency monies, is responsible f o r reviewing claims submitted by
a p p l i c a n t s f o r Federal pass- through d i s a s t e r r e l i e f funds and auditing
Federal grant programs.
CONCLUSION
ADES has mismanaged s u b s t a n t i a l amounts of emergency funds. Unauthorized
expenditures were made by circumventing the l e g i s l a t i v e appropriations
process and t r a n s f e r r i n g funds t o other accounts. This mismanagement
occurred because the former Division d i r e c t o r f a i l e d t o exercise h i s
r e s p o n s i b i l i t y t o properly expend and account f o r funds, and i n t e r n a l
controls and accounting procedures were inadequate.
RECOMMENDATIONS
1. The L e g i s l a t u r e should consider a p p r o p r i a t i n g funds t o e s t a b l i s h an
i n t e r n a l auditor p o s i t i o n reporting d i r e c t l y t o the Adjutant General.
The auditor should conduct f i n a n c i a l and compliance a u d i t s a ) at
termination of the s t a t e of emergency and b) annually f o r accounts
which are open i n excess of 12 months.
2. Annual r e p o r t s submitted t o t h e L e g i s l a t u r e i n accordance with A. R. S.
s35- 192, Subsection E should provide s u f f i c i e n t d e t a i l s on the n a t u r e
and purpose of each expenditure. Expenditures should be a p p r o p r i a t e l y
itemized or grouped t o provide adequate r e p o r t i n g .
3. The Division should r e v i s e its accounting system t o provide adequate
c o n t r o l s . Accounting procedures should include a ) f u l l documentation
of t r a n s f e r requests including the s p e c i f i c purpose of t r a n s f e r s and
b) approvals of t r a n s f e r s by the d i r e c t o r of the Division and periodic
reviews of t r a n s f ers by the Ad j u t a n t General.
FINDING I1
THE DIVISION FAILED TO COMPLY WITH COMPETITIVE BIDDING REQUIREMENTS.
The Division of Emergency Services ( ADES) c o n s i s t e n t l y disregarded, and i n
some instances circumvented, both S t a t e and F e d e r a l competitive bidding
requirements. S p e c i f i c a l l y , ADES
Did not bid competitively f o r some p r o f e s s i o n a l s e r v i c e s although
i n some c a s e s t h e former d i r e c t o r was aware t h a t c o s t s would exceed
$ 5,000;
9 Placed orders with vendors before a d v e r t i s i n g f o r bids; and
9 Circumvented bidding requirements by s p l i t t i n g payments i n t o
amounts l e s s than $ 5,000 each.
We a l s o found t h a t ADES made emergency purchases without obtaining waivers
required by S t a t e law. Because ADES did not comply with bidding
requirements, the S t a t e may have incurred excessive c o s t s .
Bidding Requirements
Both S t a t e law and Federal procurement standards r e q u i r e t h e Division t o
bid competitively f o r purchases of goods and s e r v i c e s exceeding $ 5,000.
Specific bidding procedures a r e prescribed by s t a t u t e o r e s t a b l i s h e d by
the S t a t e Purchasing Office ( SPO). However, t h e r e a r e no criminal
p e n a l t i e s prescribed f o r v i o l a t i n g these provisions and requirements.
Arizona Revised S t a t u t e s ( A. R. S.) ss41- 1051 e t . seq. r e q u i r e competitive
bidding f o r purchases of o u t s i d e p r o f e s s i o n a l s e r v i c e s exceeding $ 5,000.
Budget u n i t s must i s s u e requests f o r proposals, mail n o t i c e s t o persons
requesting n o t i f i c a t i o n and p u b l i s h r e q u e s t s f o r proposals i n newspapers.
These provisions apply t o most professional s e r v i c e s , including l e g a l and
engineering services. A. R. S. s34- 201, subsection A f u r t h e r r e q u i r e s S t a t e
agencies t o bid competitively f o r c o n s t r u c t i o n p r o j e c t s exceeding $ 5,000.
Purchases of materials and equipment i n excess of $ 5,000 a r e subject t o
competitive bidding. A. R. S. $ 41- 730, subsection A requires budget u n i t s t o
i s s u e i n v i t a t i o n s t o bid ". . . i n a s u f f i c i e n t t i m e . . . and i n s u f f i c i e n t
d e t a i l t o permit f r e e competition." Bids must a l s o be s o l i c i t e d from ". . .
the maximum number of q u a l i f i e d sources."
P r i o r t o July 1982, SPO delegated purchasing a u t h o r i t y t o the Department of a
Emergency and Military A f f a i r s among other agencies. * The Division, as part
of the Department, was n e v e r t h e l e s s bound by t h e s t a t u t o r y bidding
requirements and SPO procurement procedures.
SPO developed procedures specifying the manner i n which bidding was t o be
conducted t o meet these s t a t u t o r y requirements. According t o L e g i s l a t i v e
Council, the purchasing standards contained i n the SPO policy and procedure
manual a r e binding on a l l S t a t e agencies. A memorandum dated April 23,
1981,"" s t a t e s i n p a r t :
". . . purchase authorized agencies a r e . . . s u b j e c t
t o the manual's d i r e c t i v e s . Since t h e i r a u t h o r i t y is
derived from t h a t belonging t o the purchasing s e c t i o n
t h e s e ' o t h e r budget u n i t s ' a r e bound by a l l the
procedures and r e s t r i c t i o n s t h a t govern purchasing by
the purchasing section."
ADES is a l s o subject t o Federal competitive bidding requirements. U. S.
Off i c e of Management and Budget ( OMB) procurement standards f o r Federal
grant- in- aid agencies s t a t e i n part :
" All procurement t r a n s a c t i o n s , regardless of whether by
sealed bids or by n e g o t i a t i o n and without regard t o
d o l l a r value, s h a l l be conducted i n a manner t h a t
provides maximum open and f r e e competition. . . .
Procurement procedures s h a l l not r e s t r i c t o r eliminate
competition."
* As of July 1982, S t a t e purchasing has been c e n t r a l i z e d . SPO is the
State- authorized purchasing u n i t . Purchasing a u t h o r i t y is still
delegated t o s e v e r a l agencies u n t i l the agencies' s t a f f s can be
absorbed i n t o SPO's operations. SPO plans t o absorb the Department's
purchasing s t a f f by the end of f i s c a l year 1982- 83.
** Appendix I11 contains the memorandum t e x t .
The Federal standards r e q u i r e g r a n t e e agencies t o follow S t a t e procurement
procedures a s long a s S t a t e requirements conform t o Federal requirements.
Further, agency records must show the r a t i o n a l e f o r the procurement method
s e l e c t e d , for c o n t r a c t o r s e l e c t i o n or r e j e c t i o n and cost.
ADES has not complied with S t a t e and Federal bidding requirements. Bids
were not s o l i c i t e d f o r some purchases which exceeded $ 5,000. In other
cases, vendors were selected p r i o r t o advertisement and s o l i c i t a t i o n of
proposals. F i n a l l y , ADES circumvented the bidding process by s p l i t t i n g
payments i n t o amounts l e s s than $ 5,000. Under current s t a t u t e s , however,
the S t a t e may have limited recourse against the i n d i v i d u a l s responsible
f o r these a c t i o n s a s there a r e no criminal p e n a l t i e s f o r v i o l a t i o n s of the
S t a t e ' s bidding s t a t u t e s .
Failure t o S o l i c i t Bids - ADES f a i l e d t o s o l i c i t bids f o r some c o n t r a c t s
which exceeded $ 5,000. In a t l e a s t one case, the former d i r e c t o r was
aware t h a t project c o s t s would exceed $ 5,000. I n J u l y 1980, the former
d i r e c t o r awarded a c o n t r a c t f o r work on a r e l o c a t i o n p r o j e c t t o an
engineer recommended by the county emergency s e r v i c e s d i r e c t o r and county
engineer. According t o the ADES r e l o c a t i o n p r o j e c t d i r e c t o r , the Division
did not publish requests f o r proposals or otherwise s o l i c i t bids because
t h e p r o j e c t ' s c o s t s were not expected t o exceed $ 5,000. However, the
engineer's proposal s t a t e s t h a t t h e p r o j e c t would c o s t $ 10,460, an amount
c l e a r l y required t o be bid.
It is l i k e l y t h a t t h e former d i r e c t o r was aware t h a t c o s t s would exceed
$ 5,000 f o r two other p r o j e c t s funded primarily with Federal grant monies,
but he again f a i l e d t o s o l i c i t bids. According t o the a s s i s t a n t d i r e c t o r
f o r l o g i s t i c s , the former d i r e c t o r requested t h a t the c o n t r a c t o r
c o n s t r u c t i n g the t r a i l e r storage area a l s o construct a mess h a l l and
convert a warehouse i n t o an o f f i c e complex." The p r o j e c t s were not bid
competitively although t h e c o n t r a c t o r submitted a $ 70,000 estimate f o r the
mess h a l l , and the two p r o j e c t s were completed a t a cost of approximately
$ 270,000.
The same c o n t r a c t o r was a l s o hired without competitive bidding f o r work on
a r e l o c a t i o n p r o j e c t . When the former d i r e c t o r resigned, the Ad j u t a n t
General directed the project be bid competitively. ADES received a
proposal from only t h e c o n t r a c t o r already working on the p r o j e c t .
ADES a l s o purchased engineering s e r v i c e s f o r the van conversion project*"
without required bidding. In January 1981, a telecommunications firm
submitted a proposal f o r $ 19,980 which, according t o the p r o j e c t manager,
was not bid out.
Vendors Selected P r i o r t o Bid S o l i c i t a t i o n - I n a t least one i n s t a n c e , a
vendor had already been selected before the Division s o l i c i t e d bids. ADES
purchased an $ 11,000 van from an out- of- state vendor without obtaining
S t a t e Purchasing Office vendor lists. In f a c t , ADES ordered the van s i x
days before placing a newspaper advertisement s o l i c i t i n g bids. According
t o the ADES d i r e c t o r of l o g i s t i c s who executed the order, the Division did
not contact SPO because the purchase was highly s p e c i a l i z e d and he did not
believe l o c a l vendors could provide vans meeting ADES' s p e c i f i c a t i o n s .
However, four l o c a l vendors informed a u d i t s t a f f t h a t they could have
provided the vehicle. The d i r e c t o r of l o g i s t i c s claimed he became aware
of the out- of- state firm through a l o c a l d e a l e r who sold the vans.
However, t h i s d e a l e r t o l d u s they were not f a m i l i a r with t h e f i r m and had
never c a r r i e d the product. S i m i l a r l y , two other l o c a l vendors we
contacted had never heard of the company or product l i n e .
* Expenditures f o r t h i s p r o j e c t were a l s o i n a p p r o p r i a t e and unauthorized.
The p r o j e c t s a r e discussed i n d e t a i l i n Finding I ( see page 23).
** The van conversion p r o j e c t is discussed i n d e t a i l on page 19.
Bidding Process Circumvented - The Division appears t o have circumvented
the bidding process through bid s p l i t t i n g . In s e v e r a l cases, ADES entered
i n t o s e v e r a l consecutive c o n t r a c t s f o r i d e n t i c a l s e r v i c e s which t o t a l e d
more than $ 5,000.
Arizona law requires bidding f o r p r o j e c t s whose t o t a l cost exceeds $ 5,000
even though i n d i v i d u a l components cost l e s s than $ 5,000. According t o the
Attorney General, bid s p l i t t i n g , o r purchasing s e r v i c e s over time
u t i l i z i n g separate payments aggregating t o $ 5,000 or more, must have a
reasonable basis and cannot be used t o avoid the bidding s t a t u t e s .
ADES used consecutive c o n t r a c t s , extended c o n t r a c t s or made s e p a r a t e
payments t o t a l i n g over $ 5,000 without bidding and without apparent
j u s t i f i c a t i o n . The following cases i l l u s t r a t e improper bid s p l i t t i n g
procedures:
In t o t a l , 5 of 21 p r o f e s s i o n a l s e r v i c e s c o n t r a c t s we reviewed
exceeded the $ 5,000 l i m i t due t o extensions or use of consecutive
c o n t r a c t s . One i n d i v i d u a l was awarded e i g h t consecutive
c o n t r a c t s and two extensions. She was paid a t l e a s t $ 40,000
during the 33 months she was under c o n t r a c t . A computer
programer received e i g h t extensions f o r one c o n t r a c t and two
extensions of a contract signed when the last extension expired.
He was paid $ 17,300. A t h i r d c o n t r a c t o r received $ 10,000 under
two consecutive $ 5,000 c o n t r a c t s .
ADES purchased engineering s e r v i c e s f o r t h e s a t e l l i t e
communications system t o t a l i n g $ 21,000 without bidding because
the component t a s k c o s t s were l e s s than $ 5,000. The engineering
f i r m ' s proposal quoted a $ 1,500 u n i t cost f o r each of 14 antenna
l o c a t i o n s and described the s e r v i c e s t o be performed. According
t o the ADES project manager, ADES did not seek bids because each
l o c a t i o n was engineered i n d i v i d u a l l y . However, t h i s is not a
reasonable basis f o r bid s p l i t t i n g i n t h a t the 1 ) firm submitted
one proposal f o r a l l l o c a t i o n s , 2) u n i t p r i c e s were i d e n t i c a l ,
and 3) work t o be performed did not vary by l o c a t i o n .
No Criminal P e n a l t i e s - Current S t a t e s t a t u t e s governing bidding do not
contain criminal p e n a l t i e s f o r v i o l a t i o n s . Consequently, t h e S t a t e may
have limited recourse a g a i n s t i n d i v i d u a l s responsible f o r the v i o l a t i o n s
uncovered a t ADES. One can only speculate whether criminal p e n a l t i e s
might have served as a d e t e r r e n t i n t h e s e i n s t a n c e s .
Waivers Not Requested
for Emergency Purchases
The former d i r e c t o r exceeded h i s s t a t u t o r y a u t h o r i t y by making emergency
purchases without required waivers. Although he was subsequently informed
t h a t such waivers were necessary, ADES has not requested exemption from
the bidding s t a t u t e s .
Although Arizona law provides f o r exemptions t o competitive bidding
requirements, only t h e a s s i s t a n t d i r e c t o r f o r finance may g r a n t t h e s e
exemptions. Under the provisions of A. R. S. § § 41- 1054, subsection B and
41- 730, subsection D, t h e a s s i s t a n t d i r e c t o r f o r finance may waive
compliance with bidding requirements. According t o a L e g i s l a t i v e Council
memorandum dated December 27, 1982," the ADES d i r e c t o r must comply with
these provisions, even during a declared emergency. The memorandum s t a t e s
i n p a r t :
" Executive Order No. 79- 4 authorizes t h e d i r e c t o r of
the d i v i s i o n of emergency s e r v i c e s t o take c e r t a i n
a c t i o n s under a declared s t a t e of emergency including
e n t e r i n g c o n t r a c t s or l e a s e s . The governor
s p e c i f i c a l l y requires the d i r e c t o r t o follow ' S t a t e of
Arizona procurement procedures.'
" Regardless of the source of emergency monies, t h e
d i r e c t o r of emergency s e r v i c e s is required t o comply
with Arizona procurement procedures. The d i r e c t o r must
comply with the s p e c i a l procurement procedures i n the
event of an emergency s i t u a t i o n .
". . . The a s s i s t a n t d i r e c t o r f o r finance and not the
--- d i r e c t o r of emergency s e r v i c e s is responsible f o r
determining whether t h e t h r e a t t o public h e a l t h ,
welfare or s a f e t y is such t h a t emergency procurement
procedures must be used." ( emphasis added)
* Appendix I V contains the memorandum t e x t .
42
The Division made purchases during emergencies without obtaining waivers.
According t o ADES s t a f f , the former d i r e c t o r was informed i n March 1982 t h a t
waivers were required. Since t h a t t i m e , however, ADES did not submit
requests f o r waivers.
S t a t e May Have Incurred
Excessive Costs
The former d i r e c t o r ' s disregard f o r competitive bidding requirements may
have r e s u l t e d i n excessive c o s t s f o r purchases which were not bid.
According t o a February 4, 1980, Attorney General opinion,* public
o f f i c i a l s have a r e s p o n s i b i l i t y t o expend funds e f f i c i e n t l y through
bidding. The opinion s t a t e s i n p a r t :
". . . The lack of competitive bidding i n our
experience generates abuse and i n most instances
r e s u l t s i n higher cost. Moreover. we believe t h a t a l l
public o f f i c i a l s with a u t h o r i t y t o expend public funds
have a f i d u c i a r y r e s p o n s i b i l i t y t o do so i n the most
economical and f e a s i b l e manner." ( emphasis added)
The following case i l l u s t r a t e s how f a i l u r e t o bid competitively c a n g e n e r a t e
excessive c o s t s . The engineer hired f o r a community r e l o c a t i o n p r o j e c t ( see
page 39) upon the recommendation of County o f f i c i a l s submitted a proposal
f o r $ 10,460. Before completing the p r o j e c t ADES dismissed him. According
t o an ADES project manager, ". . . we determined t h a t he was not competent
t o continue t o discharge h i s d u t i e s . . . ." The Division had paid him a t
l e a s t $ 43,900 ( over four times the proposal amount) before t h e d i s m i s s a l .
ADES then hired a second engineer t o complete t h e p r o j e c t a t a c o s t of
$ 22,400.
* . Appendix V contains the opinion t e x t .
CONCLUSION
ADES f a i l e d t o comply with S t a t e and Federal requirements f o r competitive
bidding and f a i l e d t o obtain required waivers f o r emergency- related
purchases. As a r e s u l t , the S t a t e may have i n c u r r e d e x c e s s i v e c o s t s .
Additionally, t h e S t a t e may have l i t t l e recourse because these v i o l a t i o n s
are not subject t o criminal p e n a l t i e s .
RECOMMENDATIONS
1. The Division of Emergency Services should comply with s t a t u t o r y and
other bidding requirements. To ensure compliance, a u d i t s by the
i n t e r n a l a u d i t o r as recommended i n Finding I ( see page 35) should
include reviews f o r compliance with bidding requirements.
2. The L e g i s l a t u r e should consider e s t a b l i s h i n g criminal p e n a l t i e s f o r
i n t e n t i o n a l v i o l a t i o n s of the bidding requirements i n A. R. S. SS41- 1051
e t . seq., 34- 201 and 41- 730.
7 -
FINDING I11
THE DIVISION HAS MISUSED PERSONNEL AND CIRCUMVENTED THE STATE MERIT SYSTEM.
Division of Emergency Services ( ADES) personnel p r a c t i c e s have not
conformed t o S t a t e merit system requirements. Beginning i n 1981, the
Department of Administration - Personnel Division ( DOA- Personnel)
i d e n t i f i e d numerous questionable personnel p r a c t i c e s a t ADES. More
r e c e n t l y , our a u d i t found t h a t ADES has circumvented t h e S t a t e merit
system by misusing exempt p o s i t i o n s and using employees t o perform work
unrelated t o t h e i r o f f i c a l d u t i e s . Many of the problems i d e n t i f i e d have
not been adequately addressed. ADES' questionable personnel p r a c t i c e s
c r e a t e unnecessary and excessive c o s t s , t h r e a t e n t h e c r e d i b i l i t y of t h e
S t a t e merit system and jeopardize f u t u r e Federal funding f o r the Division.
Purpose of S t a t e Merit System
The purpose of t h e S t a t e m e r i t system is t o provide f o r e f f i c i e n t u s e o f
resources i n t h a t p o s i t i o n s a r e c l a s s i f i e d and compensated according t o
the d u t i e s performed. A sound pay plan provides the same l e v e l of pay f o r
p o s i t i o n s which a r e at a comparable l e v e l of d i f f i c u l t y and
r e s p o n s i b i l i t y . According t o a leading a u t h o r i t y , a p o s i t ion
c l a s s i f i c a t i o n plan a s s u r e s the taxpayer t h a t personal s e r v i c e s
expenditures a r e r e l a t e d t o services rendered.
Further, the merit system provides t h a t a l l p o s i t i o n s except those which
are exempt are f i l l e d competitively. T h i s e n s u r e s t h a t the best q u a l i f i e d
job candidates a r e hired and promoted i n S t a t e s e r v i c e . Numerous s t a t u t e s
have been enacted and r u l e s promulgated governing h i r i n g , promotions and
other agency personnel p r a c t i c e s . These s t a t u t e s and r u l e s a r e designed
l a r g e l y t o maintain the i n t e g r i t y and f a i r n e s s of the S t a t e m e r i t system.
However, both our review and previous DOA- Personnel a u d i t s found t h a t ADES
has operated i n many instances o u t s i d e of S t a t e merit system requirements
since 1979.
DOA- Personnel I d e n t i f i e d
Questionable P r a c t i c e s i n ADES
In 1981, DOA- Personnel i d e n t i f i e d numerous questionable personnel
p r a c t i c e s i n the Division of Emergency Services. DOA s t a f f correspondence
repeatedly addressed the following questionable personnel p r a c t i c e s i n
ADES i n 1981:
Excessive Staff Movement: ADES was constantly promoting or
t r a n s f e r ring employees t o and from l i m i t e d , exempt and permanent
positions. Some employees held up t o seven d i f f e r e n t p o s i t i o n s
i n three years.
P o s i t i o n Misuse: A personnel a s s i s t a n t was promoted t o
accountant but s t i l l performed personnel t a s k s . An
a d m i n i s t r a t i v e a s s i s t a n t ' s primary d u t i e s included computer
input, a c l e r i c a l duty.
Inappropriate Use of Exempt Positions: ADES' use of some exempt
p o s i t i o n s circumvents the m e r i t system. Two exempt appointments
were used t o f i l l permanent Office of F i r e Marshal p o s i t i o n s .
These p o s i t i o n s a r e s t i l l f i l l e d improperly ( s e e page 49).
Further, a 1979 Federal Office of Personnel Management report
i d e n t i f i e d e i g h t improper exempt p o s i t i o n s .
Improper Hiring and Promotion Procedures: Of 65 i n t e r n a l
promotions, 64 had only one a p p l i c a n t .
Possible Overstaffing and P o s i t i o n Overgrading: A business
manager ( grade 17) was r e c l a s s i f i e d t o an a d m i n i s t r a t i v e s e r v i c e s
o f f i c e r ( grade 19) with the understanding t h a t an a s s i s t a n t
d i r e c t o r position ( grade 21) would be abolished. The position
was not abolished and both were f i l l e d . Furthermore, 80 of 110
p o s i t i o n s were grade 16 or higher.
Additional problems were i d e n t i f i e d i n subsequent DOA- Personnel a u d i t s .
An a u d i t conducted i n September 1981 found t h a t
Many h i r i n g decisions were made before the r e c r u i t m e n t p r o c e s s
was complete.
a Personnel a c t i o n forms had been processed i n c o r r e c t l y and
personnel and job d e s c r i p t i o n f i l e s were inadequate.
DOA- Personnel conducted a second a u d i t i n February 1982 focusing on ADES
personnel f i l e s . S i g n i f i c a n t problems with p o t e n t i a l l y s e r i o u s
ramifications were discovered i n three areas:
a Job Applications Enhanced: In t h r e e c a s e s , job a p p l i c a t i o n s were
" enhanced," r e s u l t i n g i n employees meeting minimum q u a l i f i c a t i o n s
f o r p o s i t i o n s f o r which they would n o t otherwise q u a l i f y . In
f i v e o t h e r c a s e s v a r i a t i o n s e x i s t e d between a p p l i c a t i o n s and
resumes but probably d i d n o t a f f e c t minimum q u a l i f i c a t i o n s .
However, some of the v a r i a t i o n s were very misleading and updated
a p p l i c a t i o n s were s u b j e c t t o m i s i n t e r p r e t a t i o n . According t o
Personnel Board r e g u l a t i o n s , an employee may be removed from h i s
p o s i t i o n f o r making a f a l s e statement of m a t e r i a l f a c t i n h i s
application.
Required Documents Missing: S e v e r a l t y p e s of documents including
personnel a c t i o n f o m s , job a p p l i c a t i o n s , performance
evaluations, l o y a l t y oaths and s a l a r y adjustment forms were
missing from many of the employees1 f i l e s . Personnel Board r u l e s
require t h a t these types of documents be contained i n each
employee's o f f i c i a l personnel f i l e .
a Performance Evaluation Reports Did Not J u s t i f y Merit Increases:
Ten employees received merit increases without having performance
evaluation r a t i n g s t o support such increases. In s i x cases,
ADES submitted personnel a c t i o n forms with performance r a t i n g s
which d i f f e r e d from the employee's o f f i c i a l performance
evaluation. In four cases, employees1 evaluations contained no
r a t i n g s .
Merit System Circumvented
Our more recent review found personnel problems s i m i l a r t o those i d e n t i f i e d
by DOA- Personnel. ADES has used numerous exempt p o s i t i o n s i n v i o l a t i o n of
both S t a t e and Federal merit system requirements. Two exempt s t a t u s
employees c u r r e n t l y hold p o s i t i o n s which should have been f i l l e d
competitively. I n the past, many exempt p o s i t i o n s were used improperly. I n
a d d i t i o n , numerous s t a f f i n exempt p o s i t i o n s were paid from funds requiring
merit system coverage. Such p r a c t i c e s undermine t h e c r e d i b i l i t y of the
merit system and could jeopardize f u t u r e Federal funding.
S t a t e and Federal Requirements - A. R. S. SS26- 305. F. and 41- 771 provide t h a t
only the ADES d i r e c t o r and f i r e marshal a r e exempt from S t a t e m e r i t system
requirements. In a d d i t i o n , Executive Order 79- 4 permits ADES t o use exempt
p o s i t i o n s during a declared emergency. These p o s i t i o n s may be used only f o r
t a s k s d i r e c t l y r e l a t e d t o an emergency and only f o r t h e duration of the
8
emergency. Further, they must be paid with funds made a v a i l a b l e f o r the
emergency .
According t o L e g i s l a t i v e Council, employees performing d u t i e s r e l a t e d t o 0
regular operations a r e subject t o the m e r i t system. A December 27, 1982
memorandum* s t a t e s t h a t
" If t h e r e a r e ' exempt' personnel performing regular
d i v i s i o n operations, the v i o l a t i o n is t h e i r designation
a s exempt. . . ."
ADES is a l s o subject t o F e d e r a l m e r i t system requirements because it a
receives Federal grant- in- aid monies. According t o a 1979 U. S. Office of
Personnel Management Evaluation of ADES, only the d i r e c t o r , one
a d m i n i s t r a t i v e a s s i s t a n t and one c o n f i d e n t i a l s e c r e t a r y may be exempt.**
All o t h e r p o s i t i o n s compensated with Federal funds a r e s u b j e c t t o merit T
system coverage.
* Appendix V I contains the memorandum t e x t .
** The report was issued before the Office of t h e F i r e Marshal was
trans£ erred t o ADES. It is l i k e l y t h a t the f i r e marshal would be exempt
under F e d e r a l s t a n d a r d s because it meets the c r i t e r i a of ". . . top a
l e v e l p o s i t i o n s . . . [ which] both determine and publicly advocate
s u b s t a n t i v e public policy."
Exempt P o s i t i o n s Misused - Two Division employees c u r r e n t l y hold p o s i t i o n s
which should have been f i l l e d competitively. ADES employs 14 persons t o
coordinate emergency s e r v i c e s a c t i v i t i e s and conduct f i r e s a f e t y
i n s p e c t i o n s i n the counties. Twelve of these s t a f f members hold deputy
f i r e marshal p o s i t i o n s which were properly f i l l e d through competition.
Two i n d i v i d u a l s , however, perform i d e n t i c a l d u t i e s but were hired without
competition a s emergency s e r v i c e s s u p e r v i s o r s which a r e exempt p o s i t i o n s
e s t a b l i s h e d f o r use during declared emergencies.
ADES circumvented the merit system t o h i r e these two i n d i v i d u a l s . Both
applied f o r the covered deputy f i r e marshal p o s i t i o n s when DOA- Personnel
o r i g i n a l l y a d v e r t i s e d them i n September 1981. Neither met minimum
q u a l i f i c a t i o n requirements and were not on t h e DOA- Personnel list of
q u a l i f i e d a p p l i c a n t s s e n t t o t h e Division. ADES subsequently s e n t the
list back t o DOA- Personnel s t a t i n g t h a t none of t h e a p p l i c a n t s could be
hired because they were unwilling t o r e l o c a t e t o t h e r e q u i r e d c o u n t i e s .
The Division then hired the two unsuccessful deputy f i r e marshal p o s i t i o n
a p p l i c a n t s i n t o exempt emergency s e r v i c e s supervisor p o s i t i o n s and
assigned them t o perform t h e deputy f i r e marshal t a s k s i n t h e two
counties. The DOA- Personnel a n a l y s t assigned t o the Division a t t h e time
subsequently discovered t h a t some of t h e q u a l i f i e d a p p l i c a n t s were indeed
w i l l i n g t o r e l o c a t e .
Past Abuses of Exempt P o s i t i o n s - I n the p a s t , many exempt p o s i t i o n s were
used improperly o r were paid from funds r e q u i r i n g merit system coverage.
As noted e a r l i e r , a 1979 U. S. Office of Personnel Management Report found
e i g h t f i l l e d exempt p o s i t i o n s a t ADES i n v i o l a t i o n of ~ e d e r a lm e r i t system
requirements .
Several exempt ADES employees i n the past have been paid from funds
r e q u i r i n g m e r i t system coverage. Between July 1979 and January 1981, ADES
paid 14 exempt employees, representing 54 percent of a l l exempt p o s i t i o n s ,
from funds r e q u i r i n g m e r i t system coverage." These funds include:
* We were unable t o determine whether the exempt s t a t u s was a p p r o p r i a t e
based on d u t i e s performed. Some of these 14 employees may have
performed d u t i e s warranting exempt s t a t u s .
S t a t e personal s e r v i c e s monies appropriated f o r r e g u l a r , o p e r a t i o n s ;
0 S t a t e appropriations f o r developing the fixed nuclear f a c i l i t y
emergency response p l a n , a s t a t u t o r y r e s p o n s i b i l i t y of the agency;
A Federal grant f o r regular operations; and
A Federal grant f o r upgrading t h e s a f e t y f e a t u r e s on mobile homes
used t o house flood victims.
E f f e c t s of Improper Use - The improper use of exempt p o s i t i o n undermines the a
c r e d i b i l i t y of the m e r i t system and could jeopardize f u t u r e Federal
funding. Competitive r e c r u i t i n g and h i r i n g procedures ensure i n p a r t i a l i t y
and f a i r n e s s i n h i r i n g d e c i s i o n s . Circumvention of these p r a c t i c e s c r e a t e s ,
at a minimum, the appearance of favoritism-- that which t h e system was a
designed t o prevent. Further, Federal r e g u l a t i o n s provide t h a t funding may
be withheld i f funds a r e not spent i n accordance w i t h r e g u l a t i o n s and grant
c o n d i t i o n s , i n c l u d i n g those r e g u l a t i o n s requiring m e r i t system coverage.
Since ADES receives a s u b s t a n t i a l amount of Federal funding, t h e impact of
such a withholding would be s i g n i f i c a n t . ADES receives approximately 56
percent of its funding from Federal sources. During f i s c a l year 1977- 78
through 1981- 82, ADES received over $ 6 m i l l i o n i n g r a n t s and agreements, 9
excluding pass- through d i s a s t e r r e l i e f funds. ( See Table 1 i n the
Introduction f o r a breakdown of fund sources.)
ADES Employees Performed Work
Unrelated t o O f f i c i a l Duties
Our review a l s o found problems which had not been previously i d e n t i f i e d by
DOA- Personnel. ADES has used many employees f o r t a s k s not r e l a t e d t o t h e i r
o f f i c i a l job d u t i e s . In some instances employees performed t a s k s supporting a
a p r i v a t e organization of which the former d i r e c t o r was regional president.
In o t h e r i n s t a n c e s , employees performed Division- related t a s k s o u t s i d e t h e i r
s p e c i f i e d job d u t i e s or program. As a r e s u l t , t h e S t a t e has incurred
excessive c o s t s , and program e f f e c t i v e n e s s may have been adversely a f f e c t e d .
P r i v a t e Work - Two Division employees' primary d u t i e s involved t a s k s
supporting a p r i v a t e o r g a n i z a t i o n o f which t h e former d i r e c t o r was
regional president. The employees performed s e c r e t a r y l t r e a s u r e r t a s k s f o r
the organization, planned meetings, organized c o c k t a i l p a r t i e s and
prepared mailings and i n v i t a t i o n s . This work occurred during r e g u l a r ADES
o f f i c e hours. Both had been hired a s planners a t annual s a l a r i e s of
$ 26,000 and $ 21,000, r e s p e c t i v e l y .
Other Misuse - Some employees performed t a s k s not r e l a t e d t o t h e i r
prescribed d u t i e s . In some i n s t a n c e s , the jobs a c t u a l l y performed
required l e s s compensation than what was paid, according t o S t a t e
c l a s s i f i c a t ion/ compensation schedules . A planner whose s a l a r y was $ 19,000
per year worked a s an accounting c l e r k , a p o s i t i o n which would normally
pay $ 13,300 per year. Another planner, paid $ 26,000 per year, performed
Division public information o f f i c e r d u t i e s a t times. The p u b l i c
information o f f i c e r p o s i t i o n pays only $ 16,300 per year. A t h i r d planner
performed t r a i n i n g and education t a s k s .
Excessive Costs - As a r e s u l t of t h i s misuse of personnel, t h e S t a t e has
incurred u n n e c e s s a r i l y e x c e s s i v e c o s t s . The s a l a r i e s paid t o t h e
employees supporting a p r i v a t e o r g a n i z a t i o n a r e u n j u s t i f i e d . F u r t h e r ,
p a r t s of the s a l a r i e s paid t o t h e t h r e e employees who performed t a s k s
o u t s i d e t h e i r job d u t i e s a r e excessive since proper c l a s s i f i c a t i o n and
compensation f o r the d u t i e s a c t u a l l y performed would r e s u l t i n s i g n i f i c a n t
savings. F i n a l l y , p o s i t i o n misuse may adversely impact t h e e f f e c t i v e n e s s
of ADES' programs i f employees hired t o perform s p e c i f i c d u t i e s a r e not
a v a i l a b l e t o complete t h e s e t a s k s .
Personnel Problems Not
Adequately Addressed
Many of the personnel problems a t ADES i d e n t i f i e d by DOA- Personnel and
s u b s t a n t i a t e d by our review a r e s t i l l evident. ADES did not take adequate
c o r r e c t i v e a c t i o n i n response t o DOA- Personnel recommendations. Moreover,
s e v e r a l problems have yet t o be addressed.
DOA- Personnel Actions - DOA- Personnel attempted to address some of the
problems it identified in ADES ( see page 46). A September 1981
DOA- Personnel audit of ADES verified the existence of many problems noted
by DOA- Personnel staff. In late 1981, the DOA- Personnel assistant a
director required that any future exempt appointments at ADES be " cleared"
through him personally. An accountant position was reclassified downward
to its previous classification. One of the three employees with an
enhanced job application was allowed to resign eight months after the 0
enhancement was discovered.
ADES' Response to DOA- Personnel Audit Inadequate - ADES failed to properly
correct problems identified by the DOA- Personnel audit of its personnel a
files. For example, ADES changed ratings on employee evaluations on file
at ADES to agree with ratings reflected on personnel action forms
submitted to DOA- Personnel to support merit increases. Some missing
documents were located and placed in the files, however, employees were
also allowed to correct " enhanced" applications. DOA- Personnel staff
considered the ADES response inadequate and insufficiently documented.
Several ADES Personnel Problems Have Never Been Addressed - Several ADES
personnel problems have yet to be addressed. The DOA- Personnel assistant
director stated in an October 1, 1981, letter to the Department of
Emergency Services and Military Affairs that he
" View[ ed] the number one priority to be the immediate
classification review of the organizational structure,
particulary the Emergency Services' use of exempt and
limited appointment positions."
However, this classification review of the agency has never been conducted.
Other personnel problems also have yet to be addressed at ADES. First, the
extent to which the agency is overstaffed has never been analyzed. Second,
the problem of internal promotions has not yet been reviewed. Finally, the
two deputy fire marshal positions filled by exempt employees since 1981 have
yet to be filled competitively.
CONCLUSION
ADES circumvented the merit system, using exempt p o s i t i o n s t o perform
regular Division a c t i v i t i e s . Further, some employees performed d u t i e s other
than those r e l a t e d t o t h e i r jobs, including t a s k s supporting a p r i v a t e
organization. Many other personnel problems i d e n t i f i e d by DOA- Personnel
have not been adequately resolved. These improper p r a c t i c e s t h r e a t e n merit
system c r e d i b i l i t y , jeopardize f u t u r e Federal funding, waste S t a t e monies
and may adversely a f f e c t Division program e f f e c t i v e n e s s .
RECOMMENDATIONS
1. DOA- Personnel a n a l y s t s should conduct a study t o determine a p p r o p r i a t e
l e v e l s of s t a f f i n g a t ADES. This review should include a comprehensive
c l a s s i f i c a t i o n study t o determine a ) whether a l l exempt s t a t u s
p o s i t i o n s a r e a p p r o p r i a t e and b) whether c u r r e n t c l a s s i f i c a t i o n s
r e f l e c t d u t i e s performed.
2. ADES should f i l l the deputy f i r e marshal p o s i t i o n s competitively.
3. ADES should implement a time r e p o r t i n g system which adequately r e f l e c t s
d u t i e s performed, including the s p e c i f i c p r o j e c t or emergency on which
employees worked.
4. In conjunction with the recommendations contained i n Finding I ( see page
35), the Division should r e v i s e its accounting system t o ensure
employees a r e paid from funds r e l a t e d t o t h e p r o j e c t on which they
work. These r e v i s i o n s should include maintaining an adequate a u d i t
t r a i l .
AREAS FOR FlJRTHER AUDIT WORK
During t h e course of our a u d i t , we i d e n t i f i e d p o t e n t i a l problems r e q u i r i n g
f u r t h e r a u d i t work i n numerous areas of t h e Division of Emergency
Services. Due t o time and s t a f f i n g c o n s t r a i n t s r e s u l t i n g from the
extensive review of other i s s u e s required i n the Division of Emergency
Services, we were unable t o review t h e s e a r e a s . These p o t e n t i a l i s s u e s
a r e l i s t e d below.
1. Have p r o f e s s i o n a l s e r v i c e s c o n t r a c t s been used t o circumvent the S t a t e
merit system?
2. Has a l l work required by p r o f e s s i o n a l s e r v i c e s c o n t r a c t s been
completed?
3. Are i n t e r n a l promotion procedures a p p r o p r i a t e ?
4. Is the Division o v e r s t a f f e d ?
5. Has ADES met its g o a l s , i n c l u d i n g completion of a c t i v i t i e s required by
both S t a t e law and the terms of the F e d e r a l c o o p e r a t i v e agreement?
6. Do ADES's a c t i v i t i e s a c t u a l l y p r o t e c t t h e public? S p e c i f i c a l l y , can
the nuclear emergency e v a c u a t i o n p l a n be e f f e c t i v e l y implemented and
has t h e p u b l i c been adequately informed of contingency plans?
7. DO ADES's d u t i e s and a c t i v i t i e s d u p l i c a t e those performed by other
agencies such a s the Radiation Regulatory Agency?
8. Have r e n t a l r e c e i p t s been reverted a s required?
9. Is the physical inventory system adequate?
STATE OF ARIZONA
Department Of Emergency And Military Affairs
OFFICE OF THE ADJUTANT GENERAL
DIVISION OF MILITARY AFFAIRS
5636 EAST MCDOWELL ROAD
PHOENIX. ARIZONA 8 5 0 0 8
April 15, 1983
Mr. Douglas Norton
Auditor General
111 West Monroe, Suite 600
TELEPHONE
6 0 2 - 2 7 3 - 9 7 0 0
AUTOVON 853- 8810
Phoenix, ~ rizona 85003
Dear Mr. Norton:
Attached is my response to your letter dated March 24, 1983, regarding the
Performance Audit of the Department of Emergency and Military Affairs. The response
has been prepared in three parts. Part I covers the Division of Emergency Services,
Part I1 is the State Fire Marshal's Office and Part I11 is the Division of Military
A£ fairs.
I am gratified that the State Auditor conducted this thorough study. The audit
has assisted us in identifying problem areas which need to be addressed. We have
had no staff resource to perform an internal audit of our programs. This draft
report from the State Auditor is of the scale that provides the information required
to adjust our programs for improved management of all our divisions.
The program revisions and review will be ongoing, however due to the limited
time for this initial response, please accept this as an interim report. Additional
comments will be provided to your office after a detailed study of the report is
completed.
rn Again, I commend you for your assistance and thank you and your staff for the
cooperation received during the period of March 24 to April 15, 1983.
Sincerely,
Attachment
Major General, ArizARNG
The Adjutant General
STATE OF ARIZONA
BRUCE BABBITT
GOVERNOR
DlVlSlON OF EMERGENCY SERVICES
5636 EAST MCDOWELL ROAD
PHOENIX. ARIZONA 85008
TEL. ( 6 0 2 ) 273.9880
Mr. Douglas R. Norton
Auditor General
111 West Monroe
Phoenix, Arizona 85007
ROBERT B. TANGUY
DIRECTOR
April 14, 1983
Dear Mr. Norton:
The Division of Emergency Services has completed a preliminary review of
your draft performance audit. The major conclusions and recommendations
in the report support the priorities for change established by the new
leadership of the Division since December, 1982. Our response is attached.
Major changes instituted in the Division's accounting system and procure-ment
procedures have corrected the major deficiencies noted in those areas.
In the case of personnel management, interim actions have been taken in
preparation for a major reclassification and personnel review.
Individual program funds have been established. A proposal has been made
for regular outside audits. Strict adherence to the State merit system
has been directed by me to preclude recurrence of the deficiencies.
We will continue to review the details contained in your report as well as
those areas identified for further audit attention.
Sincerely,
Robert B. Tanguy -- Director
Enclosures
STATE OF ARIZONA
BRUCE BABBITT
GOVERNOR
RoberB B. Tanguy
DIRECTOR
DIVISION OF EMERGENCYS ERVICES
5636 EAST MCDOWELL ROAD
PHOENIX, ARIZONA 85008
TEL. ( 602) 273- 9880
April 14, 1983
FINDING oNE/ CONCLUSION
Reference Recommendation 91
( Page 35) Nonconcur in part: The internal auditor capability for
executive agencies should be established in the Department
of Administration rather than in individual departments.
This would provide a true and legitimate outside audit for
each agency. The immediate interim solution could allow
for the audit function within the Department of Military
A£ £ airs.
Reference Recommendation / I2
( Page 36) Concur
Reference Recommendation # 3
( Page 36) Concur: The Division has now programmed its accounting
system to become integrated with the Arizona Financial
Information System ( AFIS) which provides specific program
management, precise financial documentation, explanation of
all transfers and other accounting functions. Individual
program funding accounts now provide accurate and immediate
audit.
BRUCE BABBITT
GOVERNOR
STATE OF ARIZONA
Robert B. Tanguy
DIRECTOR
DIVISION OF EMERGENCYSE RVICES
5636 EAST MCDOWELL ROAD
PHOENIX, ARIZONA 85008
TEL. ( 6 0 2 ) 273- 9880
FINDING TWO/ CONCLUSION
Reference Recommendation # 1
( Page 46) Concur: The Division has i n s t i t u t e d new i n t e r n a l
controls for procurement which involve the use of
the Military Department ' s Contracting Officer and
t h e S t a t e Purchasing Office. A l l procurement by
the Division is now processed through: 1) the
program manager, 2) Division Accounting Office,
3) the Division Director, 4) Military ~ e ~ a r t m e n t ' s
Contracting Officer, and f i n a l l y 5) The Adjutant
General for approval.
STATE O F ARIZONA
BRUCE BABBITT
GOVERNOR
Robert B. Tanguy
DIRECTOR
DlVlSlON OF EMERGENCY SERVICES
5636 EAST MCDOWELL ROAD
P H O E N I X . A R I Z O N A 85008
TEL. ( 602) 273.9880
April 14, 1983
FINDING THREE/ CONCLUSION
Concur: Division personnel have been assigned to specific tasks
associated with a legitimately funded StatelFederal program.
Job descriptions, reclassifications, regrades and other
administrative actions necessary to support these personnel
realignments are in process. Training and education has been
ordered for employees and supervisors in order to improve
administration of PP& Es, to insure proper counseling, and
in general, to provide for management of personnel matters in
strict accordance with the State Personnel 14erit System.
The State Personnel Office has just completed a personnel
records audit and has been requested to conduct a complete
classification review of the Division to determine that proper
staffing levels exist and duties being performed reflect grade
levels and positions.
DEPARTMENT OF EVLERGENCY
AND MILITARY AFFAIRS
OFFICE OF FIRE MARSHAL
TABLE OF CONTENTS
SUbIMARY
INTRODUCTION AND BACKGROUND
SUNSET FACTORS
WRITTEN EESPONSE TO THE AUDITOR GENERAL'S REPORT
- Page
LIST OF TABLES
TABLE 1 - Actual Expenditures for Fiscal Years 1980- 81
and 1981- 82
- Page
2
SUMMARY
The Office of the Auditor General has conducted a limited review of the
Department of Emergency and M i l i t a r y A f f a i r s , Division of Emergency
Services, Office of F i r e Marshal i n response t o a January 18, 1982,
r e s o l u t i o n of the J o i n t L e g i s l a t i v e Oversight Committee. This review was
conducted a s a part of the Sunset review s e t f o r t h i n Arizona Revised
S t a t u t e s ( A. R. S.) § § 41- 2351 through 41- 2379.
The Office of F i r e Marshal and the F i r e Advisory Council were created by
t h e L e g i s l a t u r e i n 1972 t o ". . . promote public h e a l t h and s a f e t y and t o
reduce hazards t o l i f e , limb and property. . . ."
The Off i c e is responsible f o r statewide f i r e prevention and p r o t e c t i o n
a c t i v i t i e s . S p e c i f i c a l l y , the f i r e marshal is required t o 1) assist i n
the enforcement of S t a t e and l o c a l f i r e prevention laws and ordinances,
2) conduct p e r i o d i c b u i l d i n g s a f e t y i n s p e c t i o n s , 3) p r e s c r i b e minimum
f i r e prevention standards, and 4) ensure establishment o f s c h o o l
evacuation programs.
The eight- member F i r e Advisory Council has no s p e c i f i c s t a t u t o r y a u t h o r i t y
or r e s p o n s i b i l i t y . The d i r e c t o r of the Division consults with the Council
before r u l e s and regulations a r e promulgated.
The O f f i c e ' s programs a r e generally c o n s i s t e n t with the l e g i s l a t i v e
mandate. However, the Office has not met its inspection goals ( s e e page
4). Further review is needed t o determine:
the irnpact of i n a p p r o p r i a t e D i v i s i o n personnel p r a c t i c e s on t h e
f i r e marshal inspection program ( see page 5);
whether the O f f i c e o p e r a t e s e f f i c i e n t l y ( see page 3); and
the need f o r the F i r e Advisory Council ( see page 9).
Due to time and s t a f f i n g c o n s t r a i n t s r e s u l t i n g from the extensive review
required of issues i n the Division of Emergency Services, we were unable
t o address f u l l y these concerns.
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a l i m i t e d review of the
Department of Emergency and M i l i t a r y A f f a i r s , Division of Emergency
Services, Office of F i r e Marshal i n response t o a January 18, 1982,
r e s o l u t i o n of the J o i n t L e g i s l a t i v e Oversight Committee. This review was
conducted a s a p a r t of the Sunset review s e t f o r t h i n Arizona Revised
S t a t u t e s ( A. R. S.) Ss41- 2351 through 41- 2379.
The Office of F i r e Marshal and the F i r e Advisory Council were created by
the L e g i s l a t u r e i n 1972 t o ". . . promote public h e a l t h and s a f e t y and t o
reduce hazards t o l i f e , limb and property . . . ." U n t i l t r a n s f e r r e d t o
the Division on January 1, 1982, the Office was under t h e d i r e c t i o n and
c o n t r o l of the I n d u s t r i a l Commission.
The f i r e marshal is responsible f o r statewide f i r e prevention and
p r o t e c t i o n a c t i v i t i e s . Arizona law requires the f i r e marshal t o 1) assist
i n the enforcement of S t a t e and l o c a l f i r e prevention laws and
ordinances, 2) conduct periodic building s a f e t y i n s p e c t i o n s ,
3) prescribe minimum f i r e prevention standards and 4) ensure
establishment of school evacuation programs. The f i r e marshal has
a u t h o r i t y t o i n v e s t i g a t e p o t e n t i a l arson cases and provide f i r e prevention
and f i r e f i g h t i n g t r a i n i n g ,
The eight- member F i r e Advisory Council has no s p e c i f i c s t a t u t o r y a u t h o r i t y
or r e s p o n s i b i l i t y . The d i r e c t o r of the Division consults with the Council
before r u l e s and r e g u l a t i o n s a r e promulgated. The Council has m e t s i x
times since 1972, most recently i n 1980.
The Office is funded by General Fund appropriations. Actual and estimated
expenditures f o r f i s c a l years 1980- 81 through 1982- 83 a r e shown i n Table 1.
TABLE 1
ACTUAL EXPENDITURES FOR FISCAL YEARS 1980- 81 AND 1981- 82
Personal s e r v i c e s
Employee- related expenses
Professional and outside s e r v i c e s
Travel :
In- State
Out- of- State
Other operating expenses
Equipment
F i r e t r a i n i n g school
Total
Source: J o i n t L e g i s l a t i v e Budget Committee 1982- 83 Appropriation Report
and Department of Administration - Finance Division budget
records
Audit Scope
Our a u d i t was limited t o reviewing the Sunset f a c t o r s and i d e n t i f y i n g
p o t e n t i a l problem areas where f u r t h e r a u d i t work is needed. Due t o time
and s t a f f i n g c o n s t r a i n t s r e s u l t i n g from the extensive review required of
i s s u e s i n the Division of Emergency Services, we were unable t o review
these areas i n d e t a i l . Areas requiring f u r t h e r review a r e discussed i n
the Sunset Factors s e c t i o n .
The Auditor General and s t a f f express g r a t i t u d e t o t h e Adjutant General,
the d i r e c t o r of the Division of Emergency Services, S t a t e F i r e Marshal and
members of t h e i r s t a f f s f o r t h e i r cooperation and a s s i s t a n c e during the
course of the a u d i t .
SUNSET FACTORS
Eleven factors were reviewed t o determine i f the Department of Emergency
and Military Affairs, Division of Emergency Services, Office of Fire
Marshal should be continued or terminated i n accordance with Arizona
Revised Statutes ( A. R. S.) 541- 2354, subsection D.
1. Objective and purpose i n e s t a b l i s h i n g the agency
The Legislature established the Office of Fire Marshal and the Fire
Advisory Council i n 1972 t o ". . . promote public health and safety
and to reduce hazards t o l i f e , limb and property. . . ."
Agency goals and objectives are consistent with s t a t u t o r y i n t e n t . The
agency's s t a t e d goals are
" The promotion of public health and s a f e t y and the
reduction of hazards t o l i f e , limb and property due t o
f i r e by providing code enforcement, f i r e / a r s o n
investigation, f i r e prevention and suppression
t r a i n i n g , public education, f i r e incident reporting and
resource programs a t the s t a t e level."
2. The effectiveness with which the agency has met its objective and
purpose and t h e e f f i c i e n c y with which the agency has operated
The Office's programs are generally consistent with the l e g i s l a t i v e
mandate. However, the Office has not m e t its inspection goals.
Further review is needed t o determine whether the Office operates
e f f i c i e n t l y .
The f i r e marshal is responsible f o r statewide f i r e prevention and
p r o t e c t i o n a c t i v i t i e s . A. R. S. $ 26- 335, subsection A p r e s c r i b e s the
f i r e marshal's d u t i e s : @
" 1. A s s i s t i n the enforcement of s t a t e laws and
ordinances of c i t i e s and counties r e l a t i n g t o f i r e
prevention and protection.
2. Prescribe minimum standards f o r f i r e prevention
throughout the s t a t e .
3. Cooperate and coordinate with other s t a t e agencies
i n the a d m i n i s t r a t i o n of the s t a t e f i r e prevention
code. "
A. R. S. s26- 336, subsection A a l s o requires the f i r e marshal t o conduct
periodic s a f e t y i n s p e c t i o n s of buildings and premises. F i n a l l y ,
A. R. S. $ 26- 337, subsection A r e q u i r e s t h e f i r e marshal t o
". . . enforce r u l e s and r e g u l a t i o n s f o r e s t a b l i s h i n g
programs f o r evacuating school buildings and f o r
i n s t r u c t i n g a l l students i n public and p r i v a t e schools
as t o proper methods of f i r e prevention and
c o n t r o l . . . ."
To f u l f i l l its s t a t u t o r y d u t i e s , the Office has e s t a b l i s h e d a
comprehensive f i r e p r o t e c t i o n and prevention program. The program is
divided i n t o f o u r f u n c t i o n a l a r e a s : 1) code enforcement, including
f a c i l i t y i n s p e c t i o n s and c o n s t r u c t i o n plan reviews; 2) arson
i n v e s t i g a t i o n ; 3) t r a i n i n g and education, including t r a i n i n g
f i r e - f i g h t e r s , providing resources f o r public education and consulting
with l o c a l j u r i s d i c t i o n s ; and 4) f i r e i n c i d e n t r e p o r t i n g .
Our review revealed t h a t t h e Office has not met its i n s p e c t i o n goals.
The Office p e r i o d i c a l l y i n s p e c t s approximately 2,470 schools,
health- care f a c i l i t i e s , day c a r e c e n t e r s and f o s t e r homes, a s well a s
S t a t e buildings. Although not s t a t u t o r i l y required t o do so, the f i r e
marshal has given p r i o r i t y t o schools and attempts t o inspect a l l
schools annually. The O f f i c e h a s not met t h i s goal. According t o the
f i r e marshal, 25 percent of public schools were not inspected between
October 1981 and February 1983.
4
Improper personnel p r a c t i c e s within the Division may have adversely
impacted the O f f i c e ' s e f f e c t i v e n e s s . Two employees did not perform
required deputy f i r e marshal d u t i e s , including i n s p e c t i o n s , f o r a t
l e a s t nine months." During t h i s period, the Office was, i n e f f e c t ,
understaffed. Further review is needed t o determine the f u l l impact
of these personnel p r a c t i c e s on t h e O f f i c e ' s work load.
3. The extent t o which the agency has operated within the public i n t e r e s t
Agency o p e r a t i o n s s e r v e the public i n t e r e s t by eliminating s a f e t y
hazards i n schools and other i n s t i t u t i o n s , by providing f o r more
e f f e c t i v e f i r e - f i g h t i n g c a p a b i l i t i e s through t r a i n i n g and by
increasing public awareness through school s a f e t y programs. During
f i s c a l year 1981- 82, the Office conducted 58 c l a s s e s attended by
almost 2,500 f i r e f i g h t e r s . Further, t r a i n i n g and education programs
increase public awareness of f i r e prevention and p r o t e c t i o n . The
Office provides audiovisual m a t e r i a l s and educational l i t e r a t u r e t o
l o c a l f i r e departments f o r use i n t h e i r educational programs f o r
school children.
4. - The extent t o which r u l e s and r e g u l a t i o n s promulgated by t h e agency
are c o n s i s t e n t with the l e g i s l a t i v e mandate
The r u l e s and r e g u l a t i o n s , which c o n s t i t u t e t h e S t a t e f i r e code,
f u l f i l l the Off i c e ' s s t a t u t o r y r e s p o n s i b i l i t y t o " [ p] r e s c r i b e minimum
standards f o r f i r e prevention throughout the State." The S t a t e f i r e
code c o n s i s t s of the 1979 Uniform F i r e Code formulated by the
I n t e r n a t i o n a l Conference of Building O f f i c i a l s and the Western F i r e
Chiefs Association.
* Improper personnel p r a c t i c e s a r e discussed i n Finding I11 of the
Division of Emergency Services s e c t i o n .
5. The extent t o which the agency has encouraged input from t h e public
before promulgating its r u l e s and r e g u l a t i o n s and t h e e x t e n t t o which
it has informed the public a s t o i t s a c t i o n s and t h e i r expected impact
on the public
The agency's e f f o r t s t o s o l i c i t public input and inform t h e public of
its a c t i o n s a r e generally adequate. The F i r e Advisory Council,
c o n s i s t i n g of r e p r e s e n t a t i v e s of S t a t e agencies and l o c a l
j u r i s i d i c t i o n s t h a t t h e r e g u l a t i o n s w i l l a f f e c t a s well as a public
member, provides input when r u l e s a r e promulgated. Our review
i n d i c a t e s t h a t the Council has m e t most Open Meeting Law
requirements . However, the Council should implement a d d i t i o n a l means
of notifying the public.
S t a t e law r e q u i r e s public bodies t o provide s u f f i c i e n t public
n o t i f i c a t i o n of meetings. A. R. S. 938431.02, subsection A requires
public bodies t o post n o t i c e s and provide
". . . such a d d i t i o n a l and public n o t i c e a s is
reasonable and p r a c t i c a b l e a s t o a l l meetings."
I n a n August 19, 1975, memorandum* t o a l l S t a t e agencies, the Attorney
General noted t h a t the Open Meeting Law was not c l e a r a s t o required
n o t i c e . As a r e s u l t , t h e Attorney General provided guidelines
describing adequate notice. In a d d i t i o n t o t h e s p e c i f i c requirements
prescribed by law, the Attorney General guidelines encouraged agencies
t o use p r e s s r e l e a s e s , paid l e g a l n o t i c e s , a r t i c l e s or n o t i c e s i n
p r o f e s s i o n a l or business p u b l i c a t i o n s and mailed n o t i c e s .
The Fire Advisory Council has not u t i l i z e d a d d i t i o n a l n o t i f i c a t i o n
procedures a s recommended by the Attorney General. Notices a r e
posted, but the Council uses no other means of n o t i f i c a t i o n such a s
sending notices t o the press rooms i n the Capitol area or notifying
other agencies or public i n t e r e s t groups.
* ~ ~ ~ e nVdIIic xon tains the memorandum t e x t .
The f i r e marshal has sought input from the public on program
a c t i v i t i e s . For example, the f i r e marshal has m e t with a r c h i t e c t s ,
engineers, f i r e s e r v i c e personnel and school o f f i c i a l s t o d i s c u s s
problems encountered i n school inspections.
6. The extent t o which the agency has been able t o i n v e s t i g a t e and
resolve complaints t h a t a r e within its j u r i s d i c t i o n
The Office is not s p e c i f i c a l l y responsible f o r complaint i n v e s t i g a t i o n
and review. However, t h i s r o l e is i n h e r e n t , stemming from the
a u t h o r i t y t o inspect f o r f i r e hazards and enforce t h e S t a t e f i r e
code. The O f f i c e r e c e i v e s complaints from c i t i z e n s concerning code
v i o l a t i o n s . These complaints a r e resolved as p a r t of the O f