Performance audit, Arizona Outdoor Recreation Coordinating Commission

              PERFORMANCE AUDIT
ARIZONA OUTDOOR RECREATION
COORDINATING COMMISSION
DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
A p r i l 27, 1984
Members o f the Arizona Legi sl ature
The Honorable Bruce Babbitt, Governor
Mr. Michael A. Ramnes, Chairman
Arizona Outdoor Recreation Coordinating Commission
Transmitted herewith i s a report o f the Auditor General, A Performance
Audit of the Arizona Outdoor Recreation Coordi n 8 t i ng Commission. Thi s
report i s i n response t o an A p r i l 27, 1983 resolution of the J o i n t
L e g i s l a t i v e Oversight Committee. The performance audit was conducted as a
part o f the Sunset Review set f o r t h i n Arizona Revised Statutes SS41- 2351
through 41 - 2379.
This perf omlance audit o f tile Arizona Outdoor Recreation Coordinating
Commission i s submitted t o the Arizona Legislature f o r use i n determining
whether the Commission should be continued beyond i t s scheduled
termination date o f July 1, 1986. The report evaluates the Commission's
effectiveness i n planni ng, coordinati ng, and adlnini s t e r i ng Arizona's
outdoor recreation programs.
The report also addresses the proposed combination o f the Arizona Outdoor
Recreation Coordinating Commi ssion and the State Parks Board under Senate
B i l l 1300. P r i o r t o release o f t h i s report, Senate B i l l 1300 was passed
and signed i n t o law. However, the concerns expressed i n the report about
the possi bl e resul t i n g organization probl ems s t i l l apply.
My s t a f f and I w i l l be pleased t o discuss or c l a r i f y items i n the r e p o r t .
Respectfully submitted,
~ 0 ~ ~ R. 1 N% ort on
Auditor General
S t a f f : William Thomson
Mark Fleming
Stephen Adel s t e i n
Anthony Guari no
Jayne Hewitt
1 1 1 WEST MONROE 0 SUITE 600 PHOENIX, ARIZONA 85003 ( 602) 255- 4385
SUMMARY
The Office of the Auditor General has conducted a performance audit o f the
Arizona Outdoor Recreation Coordinating Commission i n response t o an Apri 1
27, 1983, resolution of the J o i n t Legislative Oversight Committee. This
performance audit was conducted as a part o f the Sunset Review set f o r t h
i n Arizona Revised Statutes ( A. R. S. ) % 41- 2351 through 41 - 2379.
The Arizona Outdoor Recreation Coordinating Commission was establ ished i n
1965 and i s responsible f o r planning, coordinating and administering
Arizona's outdoor recreation programs. The Commission oversees three
grants- in- aid programs - the federal Land and Water Conservation Fund, the
State Lake Improvement Fund and the Law Enforcement and Boating Safety
Fund. In addition, the Commission i s reponsible f o r i d e n t i f y i n g the
state's recreational needs and coordinating recreational plans and
a c t i v i t i e s o f federal, state and local agencies. The Commission's
a c t i v i t i e s are funded by an appropriation from the State Lake Improvement
Fund and a surcharge assessed against a l l recipients of Land and \ later
Conservation Fund grants.
The Arizona Outdoor Recreation Coordinating
Commission Should Be Meraed I n t o The State
Parks Board ( see page 13)
The Arizona Outdoor Recreation Coordinating Commi ssion's ( AORCC) functions
could be carried out more e f f e c t i v e l y under the State Parks Board ( SPB).
Consolidating AORCC and the SPB would centralize statewide recreation
pl anni ng and el iminate administrative problems caused by AORCC's current
budgetary alignment with the SPB. A1 though AORCC and SPB support a
p a r t i a l combination, completely consol i d a t i n g AORCC and the SPB i n t o one
agency i s the best a1 ternative. This would prevent recreation planning
and grant d i s t r i b u t i o n decisions from being made by two separate e n t i t i e s .
This merger can be accomplished i n a manner t h a t would a l l e v i a t e local
governments' concerns over SPB control o f grant monies. Local
government's concerns about the merger can be addressed i n several ways.
The options include changing the mandate and membersliip of the SPE to
cover i t s added responsi bil i ties, establ ishi ng a statutory advisory
coriiriiittee to assist the Board in making impartial grant distribution
decisions, or allocating a set percentage of grant money exclusively for
1 ocal projects.
Controls Over Land and Water Conservation
Fund Surcharqes Are Inadeauate ( see Daqe 23)
Controls over monies used to administer the Land and Water Conservation
Fund ( LWCF) are inadequate. Admini s t r a t i ve surcharge monies specifically
subject to legislative appropriation have not been appropriated. Further,
AORCC lacks long- term provisions for LWCF project administration.
Consequently, AORCC would be unable to finance administration of all i t s
active projects if the LNCF state grants program were terminated or
curtai 1 ed.
Surcharge monies should be appropriated each year so that AORCC can
1 egal ly expend then1 for LWCF administration. In addition, AORCC shoul d
develop plans that provide for the administration of all LWCF projects
through their completion.
The Cotmission Has / dot Effectively
Met Several State and Federal
Requirenients ( see page 31 )
The Arizona Outdoor Recreation Coordinating Commission has n o t effectively
complied with several state statutes and federal requirements. I t i s
questionable whether AORCC has satisfied i t s statutory mandate t o develop
a comprehensive outdoor recreation plan. In addition, AORCC has not met
federal compliance inspection requirements and statutory requirements t o
keep executive session minutes.
The Commission shoul d thoroughly examine the present outdoor recreation
plan to determine whether i t i s a useful statewide plan. The Commission
needs to devel op specific pl ans to meet identified recreation needs,
extend the scope of the recreation plzn beyond i t s present five- year term,
col1 ect faci 1 i ty- use data and suppl ement and improve i t s needs
identification methods. Additionally, AORCC shoul d complete a1 1 overdue
federal compl iance inspections, document the work and notify the National
Park Service of their completion. AORCC should make provisions for
regular inspections. Finally, AORCC shoul d maintain complete minutes of
all executive sessions i n accordance w i t h Arizona Revised Statutes.
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND. . . . . . . . . . . . . . . . . . . . .
S U H S E T F A C T O R S . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINDING I: THE ARIZOfdA OUTDOOR RECREATION COOFDINATING COFIMISSION
( AORCC) IS UNNECESSARY . . . . . . . . . . . . . . . . . . . . .
Consolidation o f AORCC and the State Parks Board has advantages
A complete consolidation o f AORCC and the State Parks Board i s
the optimal combination. . . . . . . . . . . . . . . . . . . . .
FIIiDING 11: CONTROLS OVER LAND AND MATER CONSERVATION FUND
ADMINISTPATIVE MONIES ARE INADEQUATE . . . . . . . . . . . . . .
AORCC spends administrative surcharge monies without
appropriations . . . . . . . . . . . . . . . . . . . . . . . . .
AORCC 1 acks provisions f o r 1 ong- term LWCF p r o j e c t
administration . . . . . . . . . . . . . . . . . . . . . . . . .
Recocmiendations. . . . . . . . . . . . . . . . . . . . . . . . .
F I l d D I IIG I I I : THE ARIZONA OUTDOOR RECREATION COORDINATING COI4MISSION
HAS FAILED TO EFFECTIVELY MEET SEVERAL STATE AND FEDERAL
REQUIREIIENTS . . . . . . . . . . . . . . . . . . . . . . . . . .
AORCC ' s planning a c t i v i t i e s need improvement . . . . . . . . . .
AORCC has not f u l f i 11 ed one federal obl i gati on and one
statutory requirement. . . . . . . . . . . . . . . . . . . . . .
Page
1
7
LIST OF TABLES
Page
TABLE 1 - Revenues and Expenditures for Fiscal Years 1981 - 82
and 1982- 83 Estimated Revenues and Budget Data for
Fiscal Year 1983- 84. . . . . . . . . . . . . . . . . . . 4
TABLE 2 - State LWCF Administrative Agencies . . . . . . . . . . . 15
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance audit of the
Arizona Outdoor Recreation Coordinating Commi ssion i n response to an
April 27, 1983, resolution of the Joint Legislative Oversight Committee.
T h i s performance audit was conducted as a part of the Sunset Review set
forth i n Arizona Kevi sed Statutes ( A. R. S. ) 5S41- 2351 through 41 - 2379.
The Arizona Outdoor Recreation Coordinating Commission ( AORCC) ,
established by the Legislature i n 1965, i s responsible for planning,
coordi nati ng and administering Arizona ' s outdoor recreation program.
AORCC was established i n response to the Federal Land and Water
Conservation Fund Act ( Pub1 ic Law 88- 578) of 1965.
Originally, the Commission consisted of the director of the Arizona Game
and Fish Department, the director of the Arizona State Parks Board and the
director of a county, city or town parks and recreation department. The
Commission was expanded to seven members i n 1976, w i t h the addition of two
more local parks directors and two public members. The local parks
directors and pub1 ic representatives are appointed by the Governor.
The Commission, w i t h the assistance of i t s support s t a f f , adni n i sters
three grants- in- aid programs - the Land and Water Conservation Fund, the
State Lake Improvement Fund and the Law Enforcement and Boating Safety
Fund. The Commission i s also responsible for conducting studies to
identify the recreational needs of the state, counties, c i t i e s and towns
and coordinating recreational pl ans and acti vi t i e s of federal , s t a t e ,
county, city, town and private agencies.
Development of AORCC's Responsi bil i t i e s
AORCC's operations have expanded since 1965. The total grant monies
obl i gated by AORCC have increased from approximately $ 1 31,000 i n 1965 to
$ 3.4 million i n 1983. The Federal Land and Water Conservation Fund was
the only grants program AORCC was responsible for i n 1965. The Commission
has since been given jurisdiction over the State Lake Improvement Fund and
the Law Enforcement and Boating Safety Fund.
Land and Water Conservation Fund - The federal Land and Mater Conservation
Fund Act of 1965 provides 50- 50 matching grants to s t a t e s for the
development o f publ i c outdoor recreation resources and faci 1 i t i e s . To
qualify for the funds a s t a t e must prepare and maintain a Statewide
Comprehensive Outdoor Recreation Plan ( SCORP) and c e r t i f y t h a t public
input was considered i n the plan's development. AORCC published i t s most
recent SCORP i n December 1983.
Land and Water Conservation Fund ( LWCF) apportionments to Arizona have
ranged from a high of $ 4.9 million in 1979 to no funding in 1982, when
Congress placed a moratorium on the funds. Arizona's apportionment for
federal fiscal year 1983- 84 is $ 1.1 mil 1 ion.
State Lake Improvement Fund - The State Lake Improvement Fund ( SLIF) was
established by the Arizona Legislature in 1900. The fund provides grants
to s t a t e agencies, counties and incorporated municipalities for the
devel opment and improvement of publ ic 1 akes and re1 ated facil i t i e s . In
1968 the 45th Legislature transferred administration of the SLIF from the
State Parks Board to AORCC.
The State Lake Improvement Fund consists of a portion of the s t a t e ' s
watercraft licensing fees and the s t a t e fuel taxes from watercraft.
Monies i n the fund have rayed from $ 299,00C i n 1971 to a high of $ 2.1
million i n 1380. The 1983 SLIF appropriation was $ 1.5 million. In
addition, SLIF provides AORCC w i t h funds for general administration, as
appropriated by the Legislature.
Law Enforcement and Boating Safety Fund - The Law Enforcement and Boating
Safety Fund ( LEBSF) was established i n 1981 to a s s i s t counties i n the
developrnent or expansion of boating ' law enforcement and safety programs.
The LEBSF, now i n i t s final year, has been administered by AORCC since i t s
inception and provided almost $ 1 m i l l i o n f o r boating law enforcement and
safety. I t s funding comes from a p o r t i o n o f the s t a t e ' s watercraft
1 icensing fees and i s subject t o L e g i s l a t i v e appropriation.
Budget and Personnel
AORCC's revenues come from the three funds it administers, and a 5 percent
surcharge on the t o t a l p r o j e c t cost assessed t o Land and Water
Conservation Fund grant recipients. The SLIF monies ( grants and
administration) and LEBSF monies ( grants ) are appropriated by the
Legislature, whereas the Land and Hater Conservation Fund monies ( grants
and surcharge) are not. The Commission does not receive any general fund
monies. Revenue and expenditures for f i s c a l years 1981- 82 and 1982- 83 and
estimated amounts f o r f i s c a l year 1983- 84 are sho:, n i n Table 1.
The Commission had a support s t a f f o f seven i n 1982- 83. Two f u l l - t i m e
positions ( FTEs) were added f o r f i s c a l year 1983- 84, giving the Commission
a t o t a l o f nine FTEs.
Audit Scope and Purpose
Our audit focused on the a b i l i t y of AORCC t o perform i t s statutory
duties. The a u d i t r e p o r t presents findings and recommendations i n three
major areas:
0 Whether AORCC should be continued as a separate agency;
o The propriety and effectiveness with which AGRCC c o l l e c t s and
expends monies f o r the administration o f the federal LWCF program;
e The extent t o which AORCC has complied w i t h appropriate state and
federal requirements.
TABLE 1
REVENUES AND EXPENDITURES FOR FISCAL YEARS 1981- 82 AND 1982- 83
ESTIMATED REVENUES AND BUDGET DATA FOR FISCAL YEAR 1983- 84
FTEs
Receipts
Actual 1981 - 82 Actual 1982- 83 Estimated 1983- 84
State Lake Improvement Fund Appropriations
Assistance t o others 1,522,200
Administration 82,800
Boating Law Enforcement & Safety Fund Appropriations
Assistance t o others 236,300
Land and Water Conservation Fund 2,941,195
Admini s t r a t i o n Surcharge 9,385
I n d i r e c t Cost Recovery
Investment I n t e r e s t
Other
Total Receipts 4.791,880
Surcharge SLIF - Total Surcharge SLIF - Total Surcharge - Total
Operating Expenditures
Personal Services/ Empl oyee Re1 ated 190,300 51,200 241,500 23,800 181,000 204,800 49,500 201,700 251,200
Professional & Outside Services 7,000 8,000 15,000 2,500 6,600 9,100 3,000 3,000 6,000
Travel: In- State 6,800 6,100 12,900 - 0- 10,300 10,300 2,000 8,700 10,700
Out- of- State 3,400 500 3,900 1,700 - 0- 1,700 1,500 - 0- 1,500
Other Operating Expenditures 34,700 15,300 50,000 2,600 50,500 53,100 12,400 43,000 55,400
Equi pment - 0- 3,000 3,000 400 - 0- 400 3,100 - 0- 3,100
Operating Sub- Total rn 84,100 326,300' 31,000 Z8- J7K7 2/ 9,400 - 256, VUO 327,900
Assistance t o Others
S t a t e l a k e Improvement Fund
Boating Law Enforcement Safety Fund
Land and Water Conservation Fund
Assistance Subtotal
Total Expenditures
NOTE: Differences between t o t a l receipts and t o t a l expenditures are p r i m a r i l y due t o differences i n adminstrative surcharge receipts and expenditures.
These surcharge monies are i n a special non- reverting account. I n f i s c a l year 1981- 82 surcharge expenditures exceeded receipts by $ 232,815. I n
f i s c a l year 1982- 83 surcharge receipts exceeded expenditures by $ 38,043 and i n f i s c a l year 1983- 84 the agency estimates receipts w i l l exceed
expenditures by $ 21 0,600.
Source: Arizona Outdoor Recreation Coordinating Commission budget requests f o r f i s c a l years 1982- 83 through 1984- 85 and State of Arizona Appropriation
Reports f o r f i s c a l years 1981 - 82 through 1983- 84.
One area for further audit work remains. Due to time constraints we were
unable to review the equity of grant distribution.
The Auditor General and staff express appreciation to the Commission and
i t s staff for their cooperation and assistance during the audit.
SUNSET FACTORS
I n accordance w i t h Arizona Revised Statutes ( A. R. S. ) $ 41 - 2354, the
Legislature shoul d consider the following 11 factors i n determining
whether the Arizona Outdoor Recreation Coordinating Coclmi ssi on ( AORCC )
should be continued or terminated.
1. Objective and purpose i n establishing the Commission
A. R. S. $ 41- 51 1.25. A states t h a t the Arizona Outdoor Recreation
Coordinating Comission was establ i shed " f o r the purpose o f planning,
coordinating and administering an outdoor recreation program i n the
State o f Arizona." blore s p e c i f i c a l l y , A. R. S. § 41- 511.25. B gives the
Conmi ssion several duties:
Liaintain a comprehensive plan f o r the development o f Arizona's
recreation resources and conduct studies t o determine the
recreational needs o f the state and i t s pol i t i c a l subdivisions.
e General l y coordinate federal, state and 1 ocal recreation plans
and developments, and s p e c i f i c a l l y coordinate and confer with the
d i r e c t o r o f water resources regarding the development o f
water- based recreation.
e Generally act as the s t a t e ' s administrative agency f o r any
federal, state or other grant monies available f o r recreation
programs, and s p e c i f i c a l l y adminster the following grant programs:
- the federal Land and Water Conservation Fund ( LWCF) i n
accordance with Public Law 88- 578;
- the State Lake Improvement Fund ( SLIF) i n accordance w i t h
A. R. S. $ 5- 382;
- the Law Enforcement and Boating Safety Fund ( LEBSF) i n
accordance w i t h A. R. S. § 5- 383.
The l a t t e r two funds are state special revenue funds with annual
appropriations available for distribution to certain state agencies
and pol i tical subdi vi sions.
2. The effectiveness w i t h which the Comission has met i t s objective and
purpose and the efficiency with which i t has operated.
AORCC has been not been completely effective i n planning and
administering recreation grant programs i n Arizona. The Commission
has met some of i t s planning respor~ sibilities and distributed all
available funds. However, some official s have questioned the
effectiveness of AORCC's statewide planning functions, and some state
and federal requirements have not been met.
AROCC's director considers the administration of LWCF and SLIF the
Commission's primary responsibil i ty. AORCC has establ ished workable
criteria for the distribution of monies i n these funds to eligible
participants and has efficiently distributed a1 1 available monies. In
addition, AORCC has been effective i n carrying o u t various limited I
plans and studies for specific purposes, including an assessment of
lake carrying capacities in the state and a report on potential water
recreation sites i n Arizona.
AORCC's primary planning effort is the Statewide Comprehensive Outdoor
Recreation Pl an ( SCORP). This document, required for participation i n
the LWCF program, was most recently updated i n 1 ate 1983. However,
i t s effectiveness has been questioned ( see page 31 ).
AGRCC has n o t sufficiently satisified other legal requirements. The
Cornmission has spent LI- dCF administrative monies without legal
appropriations ( see page 23). In addition, these funds are n o t
collected i n a manner that allows for future project administration
( see page 23). Finally, AORCC has not inspected completed projects
constructed wi t h LWCF monies as required by federal 1 aw ( see page 35).
3. The extent to which the Comission has o~ erated within the ~ u b l i c
interest
AORCC has generally operated i n the public interest by distributing
state and federal grant monies to qualified applicants. Although the
tile Conrnission has establ ished criteria for the distribution of
available funds to participants whose projects meet specified needs,
the grant awards process may not adequately address needs on a
statewide basis ( see page 31 ).
Moreover, AORCC has not operated in the public interest in that
executive session minutes have not been consistently maintained as
required by A. R. S. 538- 431 . O1 ( see page 36).
4. The extent t o which rules and regulations promulgated by the
Commission are consistent with the Legislative mandate
AORCC has no rules or regul ati ons. A1 though A. R. S. § 41- 511.25. B. 6
requires the Commission to promul gate rul es and regul ations for the
conduct of i t s meetings, the Commission has not seen the need to do
so. The Legislature may wish to change the word " shall" to " may" in
this statute.
5. The extent to which the Commission has encouraged input from the
public before promulgating i t s rules and re~ ulations and the extent to
which i t has informed the public as to i t s actions and their expected
impact on the public
AORCC encourages public input in several ways. The Conrnission makes
i t s decisions on grant applications i n public Commission meetings.
This enables the publ ic to witness the process and to ask for
clarification and provide input. This i s referred to as the " Open
Project Selection Process. " The Commission a1 so conducts needs
assessment workshops, open to the publ i c y to gain input on the types
of recreation and f a c i l i t i e s the people want. A1 though these
workshops have been criticized for a1 1 owing disproportionate input
from special interest groups ( see page 33), they provide an opportunity
for publ ic i nvol vement. In addition, AORCC informs the publ ic through
publ ication of the Statewide Comprehensive Outdoor Recreation Pl an and
other material s on recreation.
6. The extent to which the Commission has been able to investigate and
resol ve complaints that are w i t h i n i t s jurisdiction
This factor is not applicable because AORCC is not a regulatory agency.
7. Tlie extent to which the Attorney General or any other applicable
agency of s t a t e government has the authority to prosecute actions
under enabl i ng 1 egi sl a t i on
This factor is not appl icable because AORCC i s not a regulatory agency.
8. The extent to which the Commission has addressed deficiencies i n the
enabling statutes which prevent i t from f u l f i l 1 ing i t s statutory
mandate
The Commission has not identified any deficiencies i n i t s enabling
statutes.
9. The extent to which changes are necessary i n the laws of the
Comnission to adequately comply w i t h the factors 1 isted i n the Sunset
1 aws
Based on our audit work, we recommend that the Legislature consider
merging AORCC and the State Parks Board to forri! one agency totally
responsible for outdoor recreation programs in Arizona. This would
include transferring a1 1 of AORCC's staff and responsibil i t i e s ,
including grant distribution, to the State Parks Board ( see page 13).
10. The extent to whict~ the termination of the Commission would
significantly harm the pub1 ic heal t h y safety or welfare
Termination of AORCC would not directly harm the public health, safety
or welfare. However, if AORCC were terminated without provision for
the transfer of its responsibilities and resources to another s t a t e
agency, the s t a t e ' s only mechanism for administering the SLIF and LWCF
programs and distributing those programs ' monies woul d be el i m i nated.
11. The extent to which the level of regulation exercised by the
Commission is appropriate and whether 1 ess or more stringent level s of
regulation would be appropriate
This factor is not applicable because AORCC i s not a regulatory agency.
FINDING I
THE ARIZONA OUTDOOR RECREATION COORDIblATING COMLIISSION I S 1lMNECESSARY
The Arizona Outdoor Recreation Coordinating Commission ( AORCC) i s not
necessary. I t s functions can be c a r r i e d out nore e f f e c t i v e l y under the
State Parks Board ( SPB), and combining AORCC and the SPB would improve the
State's outdoor recreation program. A complete consol i dati on o f the two
agencies would be the best arrangement.
Consolidation o f AORCC and the SPB Has Advantages
Combining AORCC and the SPB woul d improve Arizona's outdoor recreation
program." A consolidation of the two agencies would improve statewide
recreation planning and e l iminate admini s t r a t i ve problems caused by
AORCC's current budgetary alignment with the SPB. A l l but two states have
combined t h e i r recreation agencies i n t h i s manner.
Benefits o f Combining S t a f f Functions - Recreation planning and
administration would improve i f AORCC were combined with the SPB. A
merger would strencjthen outdoor recreation pl anni ng and program
administration and c l a r i f y responsibil i ty f o r AORCC ' s budget and
operations.
Combining AORCC and the SPE would give the state a stronger, centralized
outdoor recreation pl anni ng agency. According t o AORCC ' s di rector, i t
would be advantageous t o have one agency responsible for 1 ong- range
planning and t o combine long- range planning with state park master
planning, because one should be an extension of the other. I n addition,
* The SPB has approximately 110 f u l l - time equivalency staff ( FTEs)
involved i n the operation o f Arizona's 20 State Parks and i n
adnlinistrative and support services. It i s responsible f o r
maintenance o f established state parks and the acquisition and
development o f future state parks. The SPB also oversees the
federally- funded H i s t o r i c Preservation Program, which provides
matching federal grants t o assist i n t ~ i s t o r i c preservation a c t i v i t i e s .
the SPB's resource- management expertise would be beneficial t o the
administration of the Land and Water Conservation Fund ( LWCF) and the
State Lake Improvement Fund ( SLIF). According to the SPB's director, the
SPB ' s resource- management responsibilities, which require it to deal
directly w i t h recreation faci 1 i ty users, woul d add an important dimension
to ttie review of LWCF and SLIF projects.
In addition, if the merger occurs, the SPB ranger staff could help with
LNCF and SLIF project inspections.* This would give AORCC personnel more
time to devote to planning and grants administration and decrease in- state
travel costs because the rangers are closer to project locations. AORCC
discontinued compl iance inspections i n 1982 when i t s staff was reduced,
and i s now trying to coniplete past- due inspections ( see page 35).
Consol iaation woul d a1 so cl ari fy SPB ' s responsibil i ty for AORCC ' s budget.
AORCC's budget Iias been appropriated as part of the SPB budget since
fiscal year 1983, the year following the n~ oratorium on the state grants
portion of the LWCF program. Despite the appropriations change, AORCC and
the SPB are separate, independent agencies, because the Legi sl ature made
no changes i n their enabling statutes.
The appropriations change has caused confusion for AORCC and the SPE. One
AORCC commissioner call ed the present budgetary a1 i gnmen t an
" organizational nightmare. " SPB members be1 ieve they are i n an
unacceptable position. Because AORCC i s a budget program of the SPB, the
Board feels it has responsibility for AORCC's budget b u t no authority.
A1 though the Board adopts AOP. CC1s budget as part of the SPB budget, i t
reviews AORCC ' s budget for information only and recei ves no justification
for any items i n AORCC's budget.
Other States - All b u t two states have placed LWCF program administration
and planning w i t h i n recreation agencies with other, related
responsibilities. Most states originally assigned LWCF administration to
* According to the SPB director, these inspections could be done by the
ranger staff within one year of the merger.
14
natural resource or recreation- re1 ated agencies. Four o f the s i x states
t h a t o r i g i n a l l y had separate agencies i n charge o f the LNCF program l a t e r
combined them w i t h other state agencies. Only one state other than
Arizona s t i l l has an independent agency t o oversee the LWCF.
The LWCF i s administered by a v a r i e t y o f agencies i n other states ( see
Table 2). Most states include LWCF administration and planning i n a
natural resource agency ( 34 percent f o r grants administration and 32
percent f o r planning). I n 22 percent o f the states LWCF planning and
grants administration i s done by parks or recreation agencies, and many
states delegate the functions t o conservation agencies. The remaining
states designate the responsi b i 1 i ty f o r the LWCF t o various other
agencies. Most states have planning and grant approval i n the same agency.
TABLE 2
STATE LWCF ADMINISTRATIVE AGENCIES
State Agency
Natural Resources
Parks/ Eecreati on*
Conservati on/ Envi ronmental Protection
Tourism/ Parks/ Recreation/ Culture
Game/ Fish and Parks
Economi c/ Communi ty Affairs/ Local Grants
State P l anni ng
TOTAL**
LCJCF LGICF
Grant Administration Planning
Source: Auditor General State Survey
Four o f the s i x states t h a t o r i g i n a l l y had separate agencies t o oversee
the LWCF have combined these agencies with other state agencies. rlorth
Dakota, Utah, V i ri gi na and kyoming each had separate outdoor recreation
agencies s i m i l a r t o AORCC. For d i f f e r e n t reasons, each o f these states
has incorporated these functions i n t o other agencies.
* Includes one agency whose sole r e s p o n s i b i l i t y i s t o oversee the LClCF
program. ** Includes Washington D. C., excludes Arizona.
NORTH DAKOTA - The State Outdoor Recreation Agency of North Dakota was
combined w i t h the State Parks Division i n 1974 to form the North
Dakota Parks and Recreation Department. The s i ~ i l a r i t y of the
progranis and the need for improved planning were factors i n the
merger. The State Parks Division did not have a planning s t a f f , and
combining the two agencies has allowed the planners to do both
comprehensive and park master planning. T h i s has made the park
planning effort more e f f i c i e n t and effective, according to a
recreation planner from the North Dakota Parks and Recreation
Department. Both LWCF grant approval and planning are now done by the
Parks and Recreation Department.
UTAH - The Utah Outdoor Recreation Agency was responsible for the LWCF
until July 1, 1982, when i t was combined w i t h the Parks and Recreation
Division of the Department of Natural Resources. The incorporation
was a cost- effective response to the Congressional moratorium on the
LIICF. Funding for the program has since been reinstated, b u t severely
reduced. The combination was logical i n view of the LWCF cuts and i s
working very well, according to Utah's LWCF project director.
VIRGINIA - On July 1, 1983, the Virginia Commission of Outdoor
Recreation was combined w i t h the Department of Conservation and
Economic Development's C i vi sion of Parks and Recreation to el iminate
dupl ication of roles. Both planning and LWCF grant decisions are done
i n the Department. According to the outdoor recreation section chief,
the combination has saved $ 73,000 and strengthened outdoor recreation
planning for the state.
WYOMING - Wyoming's Land and Water Conservation Commission was merged
w i t h the State Parks Commission i n 1967 to form the Nyoming Recreation
Comni ssion. The sinlil ar agencies were combined because both were
involved i n planning and grants administration. One benefit of the
merger has been more effective, expert planning for the state.
Only one state other than Arizona s t i l l has an independent recreation
agency administer the LWCF program. Washington s t a t e ' s Interagency
Committee for Outdoor Recreation has handled the LWCF since 1965.
A1 though Washington has considered combinations with other s t a t e
recreation- related and grants agencies, none of the proposal s have been
successful. According to the director of the Interagency Committee for
Outdoor Recreation, the s t a t e did not want to vest oversight of the LUCF
to an agency that was e l i g i b l e t o receive those funds.
A Complete Consolidation of AORCC and the
SPB is the O~ timal combination
Completely merging AORCC and the SPB to form one agency w i t h one board i s
the best a1 ternative for a combination of the two agencies. A proposal to
partially combine AORCC and the SPB has benefits b u t may create additional
problems. Totally transferring AORCC's functions to the SPB would
strengthen the state's outdoor recreation program without causing these
problems.
Partial Combination of AORCC and the SPB - To clarify budget
responsibility, AORCC and the SPB have endorsed a bill that proposes to
partially combine AORCC with the SPB. GIhile this partial combination
woul d address 1 ocal communities ' concerns and cl ari fy budget
responsibil i ty, i t tilay create other problems.
AORCC and the SPB have endorsed Senate Bill 1300, which transfers AOP, CC1s
administrative and statewide planning functions and i t s s t a f f t o the SPB.
The bill includes a provision to maintain AORCC as an independent
comission to oversee LWCF and SLIF project funding and to make final
grant decisions. In addition, AORCC would review SPB budgets and plans on
these programs and make recommendations to the SPB. Since the Commission
would have continuing responsibilities, the SPB would be required to
provide staff support to AORCC.
Local conmuni ties are apprehensive about combining AORCC w i t h the SPB for
two reasons. First, because the SPB i s el igible to receive b o t h LWCF and
SLIF monies, some local parks and recreation officials fear that the SPE
would take more than i t s share of the grant monies i f i t controlled
project selection.* Second, some local officials feel that the SPB has a
rural focus that does not sufficiently consider the outdoor recreation
needs of the s t a t e ' s urban areas.
A1 though the partial combination endorsed by AORCC and SPB would address
these concerns and cl ari fy responsi bi 1 i ty, keeping AGRCC separate from the
SPB may result i n additional problems. The proposed structure could
decrease coordination by d i v i d i n g responsi bil i ty for the s t a t e ' s outdoor
recreation program between two entities. AORCC would be making funding
* The SPE i s already the administrative agency for one grants- in- aid
program, the State Historic Preservation Program, from which i t also
receives project funding.
decisions based on the plans developed and approved by the SPB. If the
objectives of the Commission and the Board were different, the overall
outdoor recreation program i n the state would suffer.
In addition, this proposal would cause duplication of budget and plan
review. Both the Commission and the SPB would analyze the SPB's budgets
and plans for the LWCF and SLIF. While the Co~ mission woul d provide input
to the SPB, i t would have no authority over either the budget or the plans.
Equally important, conflicts over staff resources night arise due to the
proposed structure. The Commission would have no statutory authority over
personnel, and i t s requests would be subject t o prioritization by the
SPB. If either agency f e l t that the support staff was inequitably
assigned, the situation coul d cause confl i c t and further decrease
coordination.
Complete Pierger of AORCC and the SPB - Completely merging AORCC and the
SPB i s the optimal a1 ternative for combining the two agencies. Rather
than fragmenting recreation planni~ g and grant distribution between two
separate entities, a consolidated agency would provide a stronger impetus
for Arizona's outdoor recreation program. Several options can be
considered for incorporation into the merged board that woul d address
val id 1 ocal concerns.
lilerging ACRCC and the SPB into one agency would n o t fragment outdoor
recreation responsibil i ties. A complete merger woul d transfer a1 1 AORCC's
responsibilities to the SPB. The Commission would be eliminated and i t s
duties, including SLIF and LWCF grant decisions, would become the
responsibility of the SPB. Thus, a single board would be responsible for
recreation pl anni ng and coordination and grant distribution. Complete
consolidation would eliminate potential duplication of budget and plan
review and conflicts over staff resources. The consolidated agency would
have a clearer focus and be more effective in i t s new role as the s t a t e ' s
primary outdoor recreation agency.
Local government concerns about the SPB c o n t r o l l i n g the LblCF and SLIF
grant d i s t r i b u t i o n can be addressed i n various ways. I n other states,
altxost 90 percent o f the agencies i n charge o f the LGJCF administration are
e l i g i b l e t o receive LWCF grants. These states have developed procedures
t o address concerns s i m i l a r t o those i n Arizona.
e Nine states, including Nevada, New Mexico and Virginia,* have
advisory bodies t h a t make recommendations t o the s t a t e a u t h o r i t y
with f i n a l state p r o j e c t approval.** Advisory bodies i n three o f
these states consist e n t i r e l y o f pub1 i c representatives.
e Alabama, C a l i f o r n i a and South Dakota have adopted funding
forr: lulas for state and local projects. A set percentage o f the
LWCF apportionment i s available f o r 1 ocal d i s t r i b u t i o n and the
remaining funds are available f o r state projects. Thus, state
and l o c a l p r o j e c t s do not compete d i r e c t l y f o r LI. ICF assistance.
Alabama and South Dakota also have separate review boards f o r
state and local projects.
These exarnpl es provide Arizona with excel 1 ent a1 ternatives f o r
consol i d a t i o n t h a t address 1 ocal community concerns whi 1 e providing a
coordinated, statewide program. Public member advisory committees provide
independent review, promote 1 ocal comrnuni ty invol vernent and address
statewide outdoor recreation. Funding formulas ensure t h a t state and
local projects receive funds without competing w i t h each other.
Several features can be incorporated i n t o the consolidated agency t o
address the concerns o f Arizona communities. The options include:
* I n Virginia, the members of the Commission on Outdoor Recreation
formed the Committee on Outdoor Recreation following the Commission's
i ncorporation i n t o the Parks and Recreation Division o f the Department
of Conservation and Economic Development. The Committee reviews LWCF
projects and makes recornmendations t o the Board o f Conservation and
Econofilic Development. While the Board has the f i n a l authority on LWCF
p r o j e c t selection, it has adopted a p o l i c y o f accepting the
Committee's recommendations, barring unusual circumstances. ** The fiational Park Service reserves the r i g h t f o r f i n a l approval on a l l
LWCF projects.
19
0 Changing the mandate o f the SPB t o encompass both AOECC's and the
SPB ' s responsibil i t i e s . A narile change could be considered t o
emphasize the changes i n mandate.
Changing the membership o f the SPB t o increase l o c a l
representation i n order t o address i t s added responsibil i ties.
Establishing a statutory advisory committee t o review LWCF and
SLIF projects and a s s i s t the Board i n making impartial funding
decisions.
Establishing a funding formula f o r state and l o c a l projects t o
ensure equitable d i s t r i b u t i o n o f the l i m i t e d grant monies.
These options woul d resol ve 1 egitimate concerns about a state agency's
oversight o f the LWCF and SLIF programs.
CONCLUSION
AOKCC's functions could be c a r r i e d out more e f f e c t i v e l y under the SPB.
Consolidating AORCC and the SPB would c e n t r a l i z e and improve statewide
recreation planning and c l a r i f y r e s p o n s i b i l i t y for recreation budgeting.
A we1 1- planned merger o f AORCC and the SPB could address l o c a l concerns
without causing the problems inherent i n Senate B i l l 1300.
RECOMMENDATION
The Legislature should consider completely consolidating AORCC and the SPB
t o form one board responsi b l e f o r Arizona ' s outdoor recreation program.
The Legislature should also consider the f o l l owing options:
0 Changing the mandate o f the SPB t o encompass both AORCC's and the
SPB's r e s p o n s i b i l i t i e s . A name change o f the Board could be
considered t o emphasize the change i n mandate.
Changing the membership of the SPB t o increase l o c a l
representation i n order t o address i t s added r e s p o n s i b i l i t i e s .
Establishing a statutory advisory committee to review LWCF and
SLIF projects and a s s i s t the Board i n making impartial decisions.
0 Establishing a funding formula for state and local projects to
ensure equitable distribution of 1 imi ted grant monies.
COrJTROLS OVER LAND AND WATER CONSERVATIOCI FUND ADMINISTRATIVE MONIES ARE
I IiADEOUATE
Controls over monies for the administration of the Land and li'ater
Conservation Fund ( LWCF) are inadequate. Admini s t r a t i ve surcharge monies
specifical ly subject to 1 egisl a t i ve appropriation have not been
appropriated. Further, the Arizona Outdoor Recreation Coordinating
Comli ssion ( AORCC) 1 acks 1 ong- term provisions for project admini stration.
Consequently, AORCC woul d be unable to finance tile total administrative
costs of its active projects i f the LWCF program were terminated.
One of AORCC's primary responsibilities is the administration of the
federal LUCF program. The agency receives and allocates, i n the name of
the s t a t e , grant monies from the federal government. AORCC's
adn~ inistratvie responsibil i t i e s include developing and maintaining a
statewide outdoor recreation plan and ensuri ng that projects recei vi ng
LCJCF grants are i n compl iance w i t h federal program requirements. AORCC
finances the costs of administering the program by assessing a surcharge
t o recipients of grant monies. T h i s administrative surcharge is a
percentage of each r e c i p i e n t ' s t o t a l estimated project cost. Even though
a project can l a s t more than five years, the entire surcharge amount is
collected when the project is i n i t i a l l y approved. Each year AORCC
estimates its surcharge rate based on its anticipated LWCF administrative
costs for the current year. The surcharge rate has fluctuated between
1.75 percent and 5 percent since 1973 and remained a t 5 percent since
1980. From state fiscal year 1974- 75 through 1981- 82 AORCC has spent $ 1.7
million of surcharge monies.
AORCC Spends Administrative Surcharge
lionies Without Appropriations
AORCC lacks the authority to spend administrative surcharge monies without
a 1 egisl ative appropriation. According to the Arizona Legis1 a t i ve
Counci 1, the statutes require these monies to be appropriated. Operating
without an appropriation, AORCC controls and i s responsible f o r the use o f
i t s own surcharge monies.
Need For Legi s1 a t i ve Appropriation - Arizona 1 aw requires AORCC' s
surcharge monies t o be appropriated. Arizona Revised Statutes ( A. R. S.)
$ 41- 511.25. C. 2 state t h a t the Commission nay:
" Collect and expend funds appropriated t o it by the
1 egis1 ature f o r admini s t r a t i ve costs o f the program.
Such administrative costs s h a l l n o t exceed ten per cent
o f each project, and such costs t o the state, p o l i t i c a l
subdivision thereof, or other agency shall be i n the
same proportion as t h e i r ~ r o ~ o r t i o n a tseh are i s o f the
t o t a l project. " ( emphasi s added)
I n a memorandum t o the Auditor General ' s Office, the Arizona Legislative
Council affirmed that:
" The expenditure o f admini s t r a t i ve monies ( c o l l ected by
a surcharge o f up t o 10% o f a p r o j e c t ' s cost) i s
s p e c i f i c a l l y subject t o appropriation. Before 1974
A. R. S. section 41 - 51 1.25, subsection C, paragraph 2
read ' c o l l e c t and expend funds f o r adniinistrati ve costs
o f the program. . . ' This provision \; as amended i n
1974 t o add the words ' appropriated to it by the
l e g i s l a t u r e ' f o l l owing ' funds' indicating an express
1 egi sl a t i ve i n t e n t t o require an appropriation t o
authorize expenditure of administrative surcharge
monies. . . . At l e a s t two subsequent e f f o r t s have been
m a d e t o remove t h i s requirement, but each e f f o r t has
f a i 1 ed. " ( emphasis added)
The Legislative Council also pointed out that the enlployrnent of AORCC
personnel i s subject t o appropriation. The Legislative Council memorandum
states:
" A. R. S. section 35- 141 provides that:
Salaries o f s t a t e o f f i c e r s , salaries o f deputies,
assistants, clerks and enpl oyees, and expenses
incidental t o the o f f i c e s thereof, shall be paid from
the general fund or the respective fund indicated when
and as authorized i n the general appropriation act or
any other appropriation enacted by the 1 egis1 ature.
kloreover, the commission's own statute, A. R. S. section
41 - 51 1.25, subsection C, paragraph 3, 1 imi t s the
employment of personnel to the terms of legislative
appropriations. If i t i s possible to employ a person
paid solely with federal monies, according to the
conditions of Public Law 88- 578, that employee could be
retained outside the state appropriation. Otherwise,
any en~ ployee paid with state monies must be provided
for by legislative appropriation. "
A1 though AORCC has provided information regarding i t s surcharge receipts
and estimated expenditures in i t s yearly budget requests, these nonies
have never been appropriated. Between state fiscal year 1974- 75 and
1981- 82 AORCC spent $ 1.7 mil lion in surcharge money not appropriated by
the Legislature. A significant portion of this money was expended on
personal services and empl oyee- re1 ated expenditures - a vi 01 ation of
A. R. S. SS35- 141 and 41 - 51 1.
Lack of Control Over Surcharge Fionies - In the absence of legislative
appropriations, AORCC controls and i s responsible for the use of i t s own
LIXF surcharge nonies. External review of AORCC's surcharge funds i s very
1 imi ted. As a resul t, control s needed to ensure adequate admini stration
and prevent potential misuse of surcharge funds are lacking.
Review of AORCC's surcharge funds by outside agencies i s limited. AORCC's
Joint Legislative Budget Con: niittee ( JLBC) analyst has said that the JLBC
does not review the expenditure of surcharge monies. The Executive Budget
Off ice normal ly reviews surcharge expenditures by cornpari ng them with
previous years, b u t has never made formal recommendations about them. A
representative from the Department of Admini stration's Division of Finance
said that his division currently does not determine if agencies are
complying with Arizona statutes regarding appropriations. He said,
however, that the Division of Finance plans to conduct a statewide review
of agency compl iance with such statutory requirements.
The federal government does not hold AORCC accountable for i t s use of
surcharge monies. A National Park Service ( NPS) representative has said
that the federal government considers AORCC's surcharge policy a matter of
agreement between the agency and LWCF grant recipients. There i s no
federal limit on surcharge rates. In addition, the t\ lPS does not look a t
AORCC's use of surcharge monies when conducting a program audit.
The lack of external controls increases the potential for inadequate
administration and undetected misuse of surcharge monies. This problem
woul d be a1 1 eviated i f AORCC ' s surcharge monies were appropriated. The
appropriation process woul d provide for external review of the
expenditures of surcharge monies.
AORCC Lacks Provisions for Long- Term
LWCF Pro. iect Admini stration
AORCC does not have adequate arrangements for long- term LWCF project
administration. The agency's present pol icy for funding LWCF
admini s t r a t i ve expenditures i s i neffecti ve. If LWCF funds were terminated
AORCC would not have adequate funds to continue to administer projects
that are currently in progress. Monies should be allocated to administer
a1 1 projects through completion.
Ineffective Pol icy for LLCF Project Administration - AOECC has not
effectively provided for future LWCF admini stration costs. AOP, CC1s pol icy
has been to collect and expend LWCF surcharge money yearly. As a result,
AORCC would not have the money to fully administer i t s active projects if
the federal goverr~ ment ended the LWCF program.
AORCC'S policy has been to expend surcharge monies i n the year they are
collected. The surcharge i s assessed against the grant recipient as each
project i s approved. Through these surcharges, recipients shoul d pay a1 1
of AORCCJs LLKF administrative costs. Although a project can last more
than five years, AORCC collects and expends the total amount of the
surcharge the f i r s t year. AORCC's director said she believes that
collecting surcharge monies in advance simp1 ifies the collection process.
However, the surcharge rate i s based on estimates of only the current
year's expenses rather than the 1 ong- term administration costs. In
establ ishiny this pol icy, AORCC did n o t anticipate that termination or
reduction of LWCF monies coul d el imi nate i t s source of admi ni s t r a t i ve
funding.
2 6
Because AORCC i s obligated to administer LWCF projects for five or more
years, i t s pol icy to expend all surcharge monies in the year collected
leaves no funds t o administer projects beyond their f i r s t year. AORCC
will have administrative funds only if the LWCF program continues to be
funded by the federal government a t a relatively stab1 e level. This would
alloii AORCC to continue paying each year's project administration costs
( including the current costs of administering projects approved in prior
years) w i t h surcharges from newly- approved projects. However, i f the fund
were terminated or reduced, new projects could n o t provide enough revenue
for a1 1 of AORCC's current year administrative responsibil i ties. * AORCC
presently is responsible for approximately $ 3.5 mil 1 ion of undistributed
grant monies for more than 95 projects now in progress.
The 1982 LWCF moratorium illustrates AORCC's cash flow problem. In
federal fiscal year 1981 - 82 Congress placed a moratorium on LWCF state
grants. During this year AORCC's surcharge receipts f e l l t o $ 9,462 and
i t s expenditures were $ 283,703. The agency recognized the severity of i t s
cash flow problem, and in i t s official Budget Request for fiscal year
1983- 84 ( prepared on August 31, 1982) i t was stated that:
"" The loss of . . . monies for new LWCF grant awards to
Arizona communities has a1 so meant the loss of projects
against which AORCC i s . . . able to assess an
administrative surcharge to provide the necessary
funding to continue honoring the financial and legal
obligations incurred between the state and federal
government . . . . "
The agency was able to cover the difference between receipts and
expenditures in 1981- 82 because i t began the year with a balance of
$ 378,464 in i t s surcharge account. Approximately $ 1 89,000 however, was
accumulated because AORCC overestimated i t s operating costs over the
course of several years. If these monies had not been inadvertently
accumulated, AORCCis cash flow problem would have been even more serious.
* A. K. S. $ 41- 511.25C limits AORCC's surcharge rate to 10 percent of a
project's total cost. Therefore, if the LWCF apportionment fa1 1 s
below a certain level, AORCC could not possibly collect enough
surcharge dollars for even one year.
The status of the LWCF state grant program was s t i l l uncertain a t the
beginning of state fiscal year 1982- 83. That year's total apportionment,
$ 1,056,499, was the 1 owest Arizona received since federal fiscal year
1974. Additionally, this apportionment was received several months 1 ater
than in past years, delaying the flow of surcharge monies and further
hanperi rlg AORCC's abil i ty to administer projects i n progress. To generate
cash flow for administrative needs AORCC used indirect cost recovery, a
federally devised method for financing administrative costs. Under the
indirect cost method a percentage of overall project costs i s negotiated
w i t h the federal government. This percentage i s deducted from federal
grant monies for admini s t r a t i ve overhead. AORCC applied the indirect cost
recovery method several times i n 1983 to unobligated funds, which were
unexpended grant monies of completed projects. AORCC's director said that
they have not used this method i n the past because i t decreases the total
grant do1 1 ars avail abl e for projects.
In using the indirect cost method, AORCC was using unexpended grant monies
twice to generate administrative funds. First, i t had charged the
participants i t s own surcharge based on estimated project costs, of which
these unexpended grant monies were a part. Second, AORCC generated
administrative monies by directly using part of these unexpended grant
monies through i t s application of the federal indirect cost recovery
method. The $ 32,838 generated i n this way and a small portion of the
surcharge account's balance provided AORCC with $ 33,456 to meet i t s
administrative costs the year after the 1982 LWCF moratorium.
Drakiing from i t s existing balances and using the indirect cost recovery
niethod were both short- term measures that would not have solved AORCC's
cash flow problem if this situation persisted. AORCC cannot rely on i t s
unintentional ly accumulated balances as a 1 ong- term solution. In
addition, using grant monies twice to generate administrative monies i s an
unfair practice that reduces the amount of dollars available for future
projects. Because the future of the LWCF program i s s t i l l uncertain,
AORCC needs to ensure that i t has adequate funds to administer projects t o
compl etion.
Need to Ensure LWCF Project Administration - AORCC should develop reliable
methods to provide for the administration of LWCF projects through
cornpl etion. The agency should estimate the total administrative costs for
all active projects and base the surcharge rate on these estimates. This
will l e t AORCC build a reserve to finance the administration of ongoing
projects i f the LWCF is cancel led.
AORCC should compile a comprehensive project status report and then make
administrative cost estimates for all i t s active projects. The agency
could then forecast how much money i t needs to administer all i t s projects
to compl etion. These forecasts shoul d include prior years' projects that
are s t i l l i n progress with no provisions for future administration, and
new projects as they are approved each year. In this way, AORCC will
always be aware of the cost of i t s administrative responsibilities for the
future as well as the present.
Based on i t s estimated costs for administering all ongoing projects, AORCC
can compute a surcharge rate t o meet them. I n i t i a l l y , surcharges assessed
against new projects will have to be sufficient to fund the current and
future needs of those new projects, as well as the unfunded needs of older
projects. To avoid unfairly charging a single year's new projects, AORCC
may have to collect the funds necessary to finance prior years' projects
over the course of several years.* The surcharge rate should be
re- evaluated annually to ensure that grant recipients are not being over
or undercharged.
Through adequate financial planning AORCC can begin to build a reserve of
surcharge monies to guard against a future reduction or cessation of
revenue. Collecting monies in advance will expedite this. Many official s
have indicated that the continuance of LWCF state grant apportionments i s
i n doubt. Current LIICF apportionments are f a r l e s s than in the past. The
speed w i t h which AORCC builds up i t s reserve of funds will depend on the
* Other funds are also available to meet LKCF administrative costs.
AOkCC began 1983- 84 w i t h a balance of $ 139,855. In addition, AORCC
has been earning interest on i t s surcharge balance since 1982- 83.
level of LWCF apportionments and the surcharge rate that AORCC assesses
against LWCF grant recipients. AORCC should attempt to build i t s reserve
as fast as possible without charging local grant recipients an
unreasonably high rate.
CONCLUSION
Controls over AORCC's admini s t r a t i ve surcharge monies are inadequate.
AORCC i s i n viol ation of Arizona 1 aw when i t expends these monies without
1 egi s1 ative appropriation. In addition, AORCC1s discretionary power over
these monies results i n a greater potential for undetected misuse or waste
of funds. Finally, AORCC lacks an effective method t o ensure long- term
administration of LWCF projects. Consequently, the administration of
projects in progress i s not safeguarded against a cessation of the LWCF
state grant program.
RECO~" lt~ lE~~~ DATION1S
1. Surcharge monies should be appropriated each year so that AORCC can
legally expend them for LWCF administration.
2. AORCC should develop plans that provide for the administration of all
LWCF projects through their completion. This should include prior
years' projects as well as new projects.
FINDING I11
THE ARIZONA OUTDOOR RECREATION COORDINATING COMMISSION HAS FAILED TO
EFFECTIVELY MEET SEVERAL STATE AND FEDERAL REQUIREMENTS
The Arizona Outdoor Recreation Coordinating Commission ( AORCC) has not
effectively complied w i t h several s t a t e statutes and federal
requirements. I t is questionable whether AORCC has satisfied its mandate
to develop a comprehensive outdoor recreation plan. In addition, AOFCC
has not niet federal compliance inspection requirements and statutory
requirements to keep executive session minutes.
AORCC ' s Pl anni ns Acti vi t i e s
Need I~ iprovernent
AORCC may not have effectively f u l f i l led its mandate for comprehensi ve
recreation planning. Although AORCC is required by s t a t u t e to prepare and
maintain ". . . a comprehensive plan for the development of the outdoor
recreation resources of the s t a t e , " some official s have questioned the
usefulness of Arizona's outdoor recreation plan. As a result, the plan
may not a s s i s t i n the effective allocation of limited grant monies.
Pl anning Effectiveness Questioned - A1 though AORCC is required by s t a t u t e
to develop a statewide outdoor recreation plan, our analysis and the
com~ ents of several o f f i c i a l s indicate that AORCC' s present method of
recreation pl anni ng i s weak. Accordi ng to some off ici a1 s, the Statewide
C~ r~ iprehensive Cutdoor Recreation Plan ( SCORP) lacks a statewide
perspective. In addition, the SCORP lacks specific action plans and some
comnissioners feel that i t is too short- term. Also, facil ity- use data is
not included i n the SCORP, and several o f f i c i a l s have criticized the needs
assessment process. Finally, the plan i s not always used for its intended
purpose.
Five of seven members of the Commission consider the SCORP inadequate
because i t lacks a statewide perspective. Rather than presenting the
outdoor recreation needs of Arizona as a whole, these members feel the
SCORP represents an uncoordinated compi 1 ation of 1 ocal needs.
Consequently, i n the opinion of one AORCC commissioner, AORCC has
developed into a money distribution system for 1 ocal i ties, a1 locating the
funds i n reaction to local interests. While local interests are not
necessarily mutual ly exclusive of statewide needs, these interests must be
coordinated i f the state as a who1 e i s to enjoy maximum benefits.
In addition to lacking a statewide perspective, the SCORP does not include
specific plans t o meet various statewide needs. For instance, picnicking
f a c i l i t i e s are listed i n the SCORP as the number one statewide need. Yet,
the SCORP's Action Program, the implementation section, does not address
picnicking. Likewise, lack of funding, which i s considered the number one
statewide problem, is not specifically addressed i n the Action Program.
By way of contrast, the California SCORP includes a proposed solution for
each outdoor recreation issue identified and designates the agencies
responsi bl e for imp1 ementing the sol utions.
The SCORP has also been considered too short- term by two AORCC
conmissioners. According t o one commissioner, money i s continuously being
spent on projects, b u t long- term outdoor recreation needs i n Arizona have
not been projected. Ten year outdoor recreation planning i s done in both
Utah and California, and Virginia's planning cycle extends 15 to 20
years. The short- term nature of the SCORP may be leading to ineffective
decisions by the Commission. Projects that are funded now because they
f i t into the five year plan, may not address future outdoor recreation
needs i n Arizona. Two commissioners suggested that the SCORP should
consider needs for as long as 30 or 40 years. Longer range planning could
significantly influence the location, size and design of many facil i ties
being built today.
The SCORP does n o t contain facility- use data indicating to what extent
various f a c i l i t i e s are used. About half of the states consider use data
when making Land anci Water Conservation Fund ( LWCF) project decisions, and
some commissioners see a strong need for collecting use data to aid i n
determining whether a facility should be funded. Because use data has not
been available for the Commission, AORCC has made many of i t s funding
decisions without knowing how extensively the facil i t i e s in various areas
are used. In the opinion of one commissioner, i f use data had beer1
available a $ 250,000 LWCF swimming pool project may not have been funded
because of limited use. According to the executive director of AORCC,
staff members have not had the time to collect this information for the
Commission.
Four conlnissioners and four 1 ocal park professional s have criticized
AORCC's needs assessment workshops because of the influence of special
interest groups. AORCC uses these workshops, which are open to the
publ i c y to obtain publ ic input on outdoor recreation needs. According to
a National Park Service ( ElPS) o f f i c i a l , the workshops provide an
opportunity for the public to participate b u t the workstlops are attended
primarily by public interest groups. In his opinion, planners have to be
careful when using thi s information because i t i s not necessarily
representative of the general public. In addition to the influence of
public interest groups, attendance a t these workshops can be sparse. A
review of the meeting rosters for AORCC's 1983 needs assessment workshops*
showed that less than 15 people attended workshops in four separate
counties. For example, the Apache County workshop was attended by only 11
i ndi vi dual s.
Other states assess recreation needs in various ways. Because of the
possibility that a particular public interest group might dominate a
workshop, Utah's SCORP planners compare workshop results w i t h the results
of a random survey of the general public. If a disparity exists the
planners do additional research to identify the actual outdoor recreation
needs. Missouri's SCORP planners have discontinued using needs assessment
workst- lops because of the h i g h cost of the workshops and the
disproportionate influence of public interest groups. Missouri has since
* Needs assessment workshops are held every two years. Three workshops
are held i n llaricopa County, two i n Pima County and one i n each of the
other counties.
adopted the Delphi technique* to assess future needs. California and
Virginia survey their citizens to determine outdoor recreation needs of
the state.
Although the SCORP includes a statement that i t i s " intended to serve as a
basis for count1 ess decisions re1 a t i ve to outdoor recreation which are
made by numerous pub1 ic and private individuals and organizations
throughout the State," the degree to which i t i s used i n Arizona is
questionable. According to a representative of the Governor, the SCORP
has never been used i n s t a t e budgetary decisions. In addition, of the 18
county, c i t y , or town parks and recreation o f f i c i a l s contacted recently,
f i v e s t a t e d t h a t the SCORP is not useful and four others were unfamiliar
w i t h it. Rather than using the SCORP as a guide for planning, some LWCF
participants use i t a f t e r the fact to justify project grant applications.
In contrast, local park and recreation professionals i n California,
Missouri and Virginia told us they use the SCORP as a planning document.
Recreation acquisition and development decisions i n these states are made
based on information provided i n the SCORP.
lihile AORCC is required by law to maintain a comprehensive outdoor
recreation plan for the development of the outdoor recreation resources of
the s t a t e , according to one AORCC commissioner, " the only reason we have a
SCORP is to get federal funds . . . without federal funds, there would not
be a SCOW." Three o f f i c i a l s of the NPS Western Region also describe
Arizona as a s t a t e that prepares a SCORP primarily to receive the Land and
\ dater Conservation Fund monies, a1 though they do not take exception to
this approach. In contrast, two NPS o f f i c i a l s said that some other states
are comn~ ti ted to planning , regard1 ess of the LWCF requirements. NPS
o f f i c i a l s have said that Arizona is i n compliance w i t h all federal SCORP
requirements and the SCORP has benefited the people of Arizona. A1 thougl~
* The Dell; hi technique involves surveying a panel of individuals and
then notifying the panel members of the compiled responses. T h i s
gives them the opportunity to provide i n p u t i n 1 ight of everyone
e l s e ' s ideas. This process of feedback and i n p u t continues until
conclusive resul ts are compi 1e d. bli ssouri ' s Delphi panel consi S ~ Sof
1,200 citizens, recreation professionals, 1 ocal government officials
and public i n t e r e s t group members.
the SCORP dces ful f i l l federal requirements, our analysis indicates that
the statewide plan coul d be improved.
Effects of Planning Weaknesses - The SCOI? P1s weaknesses may lead to
ineffective allocation of very limited grant monies. AORCC i s charged
w i t h developing a statewide outdoor recreation plan that examines
Arizona's needs as a whole. tlowever, i n the opinion of one AORCC
commissioner, most grant monies go to local communities whose projects nay
address only the needs of that community and not necessarily the needs of
the state. Given unlimited resources, all local needs could be
addressed. Because resources are 1 imi ted, however, decisions on the
allocation of monies must be rnade on a statewide basis. The SCORP, i n i t s
present form, cannot be used to make funding decisions that ensure that
the state i s getting the maximum benefit for i t s recreation do1 1 ar.
AORCC's recreation planning should take on a statewide perspective to
ensure the optimal allocation of available resources. To do this, action
programs must include specific, long- range plans to meet identified
needs. Additionally, AORCC shoul d col1 ect faci1 i ty- use data and
supplement the needs identification process to ensure adequate pub1 i c
participation. By using this additional information the Commi ssion will
be able to ensure that maximum statewide benefit i s achieved from the
1 imi ted outdoor recreation funds avail abl e.
AORCC Has Not Ful f i 11 ed One Federal
Obliaation and One Statutory Reauirement
AORCC has not complied w i t h one Department of the Interior regulation and
one Arizona statute. AORCC has not completed federal compliance
inspections, as required by the Department of ttie Interior. In addition,
AORCC has failed to meet state requirements pertaining to execu- tive
session minutes.
Compliance Inspections - A1 though AORCC i s required by the Department of
the Interior to inspect LWCF projects for compliance every five years,
AORCC has not ful f i l l ed this requireme~ t. Compl i ance inspections are done
to ensure that f a c i l i t i e s are intact and are being maintained. According
t o 14PS o f f i c i a l s , as o f February 1984 AORCC was past due on 229 compliance
inspections and i s t h e o n l y state delinquent on these inspections. AORCC
s t a f f discontinued p r o j e c t compl iance inspections when the s t a f f was cut
i n 1982.
The NPS has n o t i f i e d AORCC o f i t s delinquency and has requested t h a t AORCC
devise a plan t o complete the inspections. LWCF reimbursements and
additional funding could be withheld i f inspection requirements are not
met. As o f December 1983, the Department o f the I n t e r i o r had
approximately $ 3 m i l 1 ion i n LWCF monies f o r Arizona p r o j e c t reimbursements
t h a t could l e g a l l y be withheld.
According t o AORCC's executive director, 143 o f these inspections have
already been performed, and AORCC plans t o complete a l l inspections by May
1984. However, according t o AORCC s t a f f , the ). IPS had been n o t i f i e d o f
only 46 o f the completed inspections as o f A p r i l 5, 1984. The
doc~ mentation must be submitted t o the NPS t o s a t i s f y the inspection
requirement.
Executive Session biinutes - ACRCC has not compl i e d w i t h Arizona statutes
t h a t require minutes t o be taken a t a1 1 executive sessions. I n addition,
those executive session minutes t h a t were kept were not maintained
securely and do not always contain the specific information required by
1 aw.
AORCC has not s a t i s f i e d Arizona Revised Statute ( A. R. S. ) S38- 431.01. 8,
which requires t h a t " a l l public bodies, except f o r subco~ mittees and
advisory committees, shall provide f o r the taking o f w r i t t e n minutes or a
recording o f a1 1 t h e i r meetings, i n c l udi ng executive sessions. " From
A p r i l 1980 through December 1983 AORCC held nine executive sessions.
According t o AORCC's d i r e c t o r , minutes were not taken a t four o f the nine
sessions because she was not aware o f the requirement. Furthermore, the
minutes o f one executive session were l o s t .
CONCLUSION
AORCC may be ineffective i n meeting i t s comprehensive planning mandate and
has c l e a r l y violated other state and federal requirements. AORCC's
comprehensive planning has been c r i t i c i z e d and may not be meeting
statutory guide1 ines. I n addition, AORCC has f a i l e d t o complete federal
compliance inspections and t o s a t i s f y statutory obligations f o r taking and
keeping executive session minutes.
REC014MENDATI ONS
1. The Commission should thoroughly examine the SCORP t o ensure t h a t it
i s a useful statewide outdoor recreation plan. The Commission needs
t o consider:
o Developing , specific action plans t o meet i d e n t i f i e d outdoor
recreation needs and problems.
o Expanding the scope o f the SCORP beyond the five- year period t o
i ncl ude 1 ong- term pl anni ng.
o Collecting f a c i l ity- use data and supplementing the needs
assessment workshops with other methods.
2. AORCC should complete and f u l l y document a l l federal compliance
inspections t h a t are past due and n o t i f y the NPS o f t h e i r completion.
I n addition, AORCC should make provisions f o r ongoing inspections.
3. AORCC should keep minutes o f a l l executive sessions.
GOVERNOR
i3ruce Dabbitt
ECREATION
CO MSAISSION
? v4icha- e lA . Rarnnes: Chairman 1, arry i,!.- -! armon, Vice Chair~ nan
3iid Bristow Iarnes i'i. Co! iey
(;@ Rc Lacs ','<! il! iam 6. i?. oe
J a r y iiiicz divens, ; 3irector/ SL0
1624 West Adams Room 101 Phoenix, Arizona 85007 ( 602) 255- 5013
- - -. -. . , dr. bou? lzs 2. .. iorton
'{ uaitor Generai
1 l1 ;. t; est : sicnroe: Suite 600
P!: oenis. Arizona 35003
Dear Mr. Norton:
? lease find enclcsea XQliCC's written response t o the revised 7reiiminsry report & aft of
"'\ Performance i- Iudit of the Arizona Jutdoor Recreation Coordinating Commission - 11
.? eport to the Arizona Le,.;, islature".
S!; oluld you or your staff have any questions rqardit- q AOI? CCts response: please call me.
Sincereiy, h
hlary ~ g caeiv ens
Directcr/ State Liaison Officer
Enclosure
Response
t o the Performance Audit of the
Arizona Outdoor Recreation Coordinating Commission
Conducted by the Office of the Auditor General
April 1984
This is in response t o the revised draft report of the performance audit of the Arizona
Outdoor Recreation Coordinating Commission ( AORCC) conducted by the Office of the
Auditor General. As indicated in the report, the audit focused on three issues; 1)
whether AORCC should continue as a separate agency, 2) the- propriety and effectiveness
of funds collected and expended in the administration of the federal Land and Water
Conservation Fund ( LwCF) program, and 3) the extent to which AORCC complies with
federal and s t a t e requirements.
Sunset Factors
1. The second duty described on page 7 indicates a requirement that AORCC
" coordinate and confer with the + irector o f water resources regarding the development of water- based recreation." ARS 41- 51 1.25. B refers to an agency, not a specific position
within the agency. AORCC has often conferred with various staff members of the
Department of Water Resources ( DIVR) and has directly involved the department in the
preparation of a study of potential water- based recreation s i t e s i n the State. Any time
AORCC has received a project relating t o lake restoration or renovation or dam
construction, input from DWR has been both sought and received.
2. In the first paragraph under Sunset Factor 112 on page 8, the report indicates
t h a t " AORCC has not been completely effective in planning and administering recreation
grant programs in Arizona". Nowhere in the report a r e t h e r e criteria by which the
effectiveness of AORCC's planning or grants administration are described; nor are
specific factors related t o support a statement of ineffective administration.
3. In the same paragraph reference is made t o " some s t a t e and federal
requirements have not been met." AORCC has met all federal requirement for the
administration of the LWCF program. The National Park Service ( NPS) acknowledges
that Arizona has recognized the values of statewide, comprehensive and long- range
outdoor recreation planning by expanding the Statewide Comprehensive Outdoor Recrea-tion
( SCORP) planning efforts beyond those specific requirements for eligibility; also,
t h a t AORCC has met federal requirements and guidelines and has been commended for a
job well done, as evidenced by the attached letters received from the NPS Associate
Regional Director. The degree t o which AORCC is meeting State requirements is a
matter of opinion.
4. The third Sunset Factor, found on page 9, questions the adequacy of AORCC1s
grants- in- aid process as i t addresses statewide needs. The Commission has discussed the
effectiveness of the LWCF grants- in- aid program in meeting statewide needs on a
number of occasions. The AORCC staff is convinced t h a t statewide needs have been and
are continuing t o be met through the processes annually established by the Commission.
This position has been officially supported by the Commission and the importance of
meeting statewide needs remains high on AORCC1s agenda.
5. The AORCC acknowledges the deficiencies in the maintenance of the minutes
of executive sessions and ha already taken corrective action t o ensure that they are kept in accordance with ARS 53 8- 431.01.
6. Sunset factor # 5, which is concluded on page 10, could be strengthened by
adding that all AORCC deliberations are conducted in open public meetings for which
over 300 individuals, members of the press and grant participants are sent copies of the
impending agenda.
Find ngs
The audit report discusses three findings; 1) the AORCC is unnecessary, 2) the
controls over L WCF administrative monies are inadequate, and 3) the AORCC has failed a
t o effectively meet several states and federal requirements.
I. The AORCC is unneccessary.
The first paragraph is misleading. The statement t h a t t h e Commission is
unnecessary in this paragraph i s contradicted by a statement further in the report which
suggests that such a body should function as an advisor t o t h e S t a t e Parks Board ( SPB) on
matters relating t o its present functions - should the two be merged. While the functions
of AORCC are recognized as being necessary, the report fails t o support specific ways in
which these responsibilities could be more effectively carried out by combining them
with those of SPB.
In the fourth paragraph on page 13, AORCC's director is reported t o have said that
" it would be advantageous to have one agency responsible for long- range planning and t o
combine long- range planning with s t a t e park master planning, because one should be an
extension of the other." This statement has been taken out of context. AORCC's
director was asked what advantages would there be t o a merger of AORCC with SPB.
The answer was t h a t the only advantage would be a strengthening of SPB long- range
planning efforts and that State Park master planning was a site specific extension of
Statewide comprehensive planning ( as accomplished by the SCORP).
On page 14, in the second paragraph, the report s t a t e s t h a t SPB ranger staff could
help with LWCF and SLIF project inspections. There is no doubt that such personnel are
capable of conducting any of the inspections necessary in the administration of the grant
programs for which AORCC i s presently responsible; they would in some cases, however,
be reviewing the facilities they manage. The supposition that " this would give AORCC
personnel more time to devote the planning and grants administration and decrease in-s
t a t e travel costs'' is unsubstantiated.
Paragraph 2 of page 15 suggests that, because most other states administer the
LWCF program differently than Arizona and through a variety of agency configurations,
the present situation in Arizona is inappropriate. Without a complete analysis of each
state's administration, this conclusion cannot be considered as valid.
The report alludes t o the fact that additional problems may result with the imple-mentation
of SB1300 but fails t o relate what they might be. The f i r s t sentence of page
17 s t a t e s t h a t a total transfer of AORCC1s functions t o the SPB would strengthen the
state's outdoor recreation program without causing these problems. There are no
substantive suggestions as to how the state's outdoor recreation program will be
strengthened.
The footnote at the bottom of the page 17 suggests that because the SPB admin-isters
the S t a t e Historic Preservation ( SHP) program i t can also administer AORCC's
programs. The types of grants, parameters, total dollars, length of duration, and the
planning required, as well as other requirements, are significantly different. The SHP
program also deals with private citizens who are eligible t o receive grants. The supposi-tion
that, since SPB administers the SHP program this would prevent any
disproportionate share of L WCF or SLIF monies being granted t o the SPB, is erroneous.
Since SB1300 has been signed into jaw, the discussion regarding potential problems
supposed t o be inherent with this legislation and the subsequent conclusions found on
page 20 and 21 are moot.
11. ControIs over L WCF administrative monies are inadequate.
There appear t o be three points addressed in t h e finding; 1) the ineffective way
AORCC determines the percentage of surcharge t o assess, 2) the lack of legislative
appropriation of t h e surcharge fund, and 3) the need for an account balance sufficient t o
sustain the administration of the grant program for the life of a project.
I t is apparent from the sentence beginning on line 11 of t h e second paragraph of
page 23, that the method AORCC uses to determine the surcharge percentage assessed
on projects t o support the administration of the LWCF program has been misunderstood.
It is inaccurate t o characterize AORCC's method of estimating the annual LWCF
surcharge rate as being based on " anticipated administrative costs f o r t h e current
year." Prior t o 1974, AORCC's LWCF surcharge income was the sole source of revenue
t o support LWCF grant administration and SCORP planning, as well as the agency's
operation of the S t a t e Lake Improvement Fund. In these years, the LWCF surcharge r a t e
necessarily reflected an amount sufficient t o fund the operation of the entire agency.
This time period precedes the involvement of any current AORCC staff, however, it is
logical to assume t h a t t h e estimated needs for surcharge revenues could only be based on
anticipated future needs. Since the actual collection of funds could begin only after the
following sequence of events occurred: Congress acted on appropriations t o the LWCF
program; Letters of Apportionment were signed by the Secretary of Interior and received
by the State; project grants were approved by the ( then) Bureau of Outdoor Recreation,
aBnads; e dP oanrt tichiep aanmte nAdgmreeenmt teont As RwSe 5 5e - 3t8ra2 nbsym liattwesd 1 b9y7 4, A COhR. C17C4 $ o 1L, wWhCicFh grreaqnuti rreedc liepgieisnltas-.
tive appropriation of SLIF monies to specific projects, AORCC f i r s t requested a SLIF
appropriation t o support i t s administrative costs of operating t h e SLIF program as a
percentage of the agency's overall costs. This change required a modification in
AORCC's budgeting procedures in 1974 and subsequent years. The method used to deter-mine
the appropriate percentage of the total agency's effort expended in operating the
SLIF program was based on actual records of staff time kept during the preceeding fiscal
year. This percentage was then translated into a SLIF budget request to the S t a t e Legis-lature
which was accompanied by the Agency's LWCF budget request ( both admin-istrative
and pass- through). It is essential to distinguish between the methods used t o
calculate the SLIF administrative budget request and the LWCF surcharge. While t h e
SLIF percentage was based on actual time records, the overall costs to AORCC in
fulfilling both its LWCF and SLIF mandates had to be estimated using anticipated staff
and operating needs in the ensuing fiscal year for which appropriations were being
requested. Therefore, even though the percentage of SLIF budgetary contribution t o
total agency administrative costs was based on actual or " current" year records, the
amounts requested for both SLIF administration and LWCF surcharge were based on
anticipated future fiscal year needs.
This necessity of budgeting on the basis of future needs for the entire agency was
accentuated in 1976 when the federal government converted i t s fiscal year t o October 1 _ through September 30. This action further delayed into the S t a t e fiscal year ( July 1 t o
June 30) the period of time in which LWCF surcharge monies could realistically be
expected to be received by AORCC. Since 1976, AORCCts budget requests have been
prepared in July, submitted in August and were predicated upon anticipated agency
operating costs f o r t h e ensuing fiscal year. The establishment and asssessment of an
LWCF surcharge r a t e has never coincided with these benchmark months. The
Commission has normally approved L WCF projects and established surcharge rates in the
late fall after the amount of total L WCF apportionment to Arizona has been determined
by the Secretary of Interior. This rate has traditionally been assessed at a level adequate
t o provide the amounts estimated and requested in the submitted budget. LWCF
surcharge monies have actually been collected, but not expended, in advance of the
beginning of the fiscal year for which they were budgeted; although surcharge revenues
are not predictably received within a given time period. Traditionally, the Legislature
has been provided with supplemental budget documents listing approved L WCF projects
thereby substantiating the agency's surcharge request.
This procedure has not only served the Commission well over the years but it has
provided the Legislature with accurate information while avoiding potential miscalcula-tions
of surcharge rates based on over or under optimistic forecasts of L WCF appropria-tions
from Congress. To s t a t e that AORCC uses current year administrative costs in
determining annual LWCF surcharge rates is an inaccurate statement and greatly over-simplifies
this aspect of agency's budgeting process.
The audit report suggests that AORCC has been illegally expending LWCF
surcharge monies because they have not been appropriated t o them by the Legislature.
The Commission has provided the budget analysts and subsequently the Legislature with
the same information t o support LWCF expenditures that has been provided t o support
the appropriation of the S t a t e Lake Improvement Fund ( SLIF) administrative monies.
The f a c t t h a t AORCC reviews the budget recommendations, approves the amounts
allocated t o the various account items and deliberates its budget needs and subsequent
requests t o the Legislature in open public meetings assists in assuring the credibility of
its use of surcharge funds.
The second paragraph on page 35 suggests that once the Legislature appropriates
the funds to administer the LWCF program, the potential misuse of such funds would be
prevented. The several fiscal audits which have been conducted by the office of the
Auditor General have substantiated the propriety with which these funds have been
expended.
Beginning on page 26, the report discusses the lack of provision for long- term
administration of the grants- in- aid portion of the L WCF program. This description lacks
an apparent understanding of the Commission's policy on assessing a surcharge, the
nature of the grant program and administrative changes which would be made at both the
federal and s t a t e levels were the LWCF program permanently terminated.
1. The surcharge assessment, as discussed in more detail earlier i n this response, is
based on anticipated administrative costs which includes support for both planning and
grants. At the time of the moratorium on state apportionments from LWCF, the agency
employed 12 FTEs. Based on the concern that future LIVCF support would be limited,
the Commission reduced the FTE to 7. This number was based on a determination that 6
FTE were needed t o support the on- going SLIF and BLESF programs and 1 FTE to process
the LWCF project billings. This action prompted a change in the budget process which
resulted in a s t a t e appropriation t o support the 6 FTE from SLIF revenue. The remaining
LWCF surcharge account was sufficient t o support 1 FTE for approximately 18 months.
AORCC determined that because the State's statutes mandated the development and
maintenance of a statewide comprehensive outdoor recreation plan, the use of general
revenue funds t o support this effort was entirely appropriate. A corresponding request
was subsequently made of the Legislature t o reflect this position. These requests have
been denied. One rationale given f o r t h e denial was that LWCF monies were still being
apportioned t o Arizona; therefore, general revenue funds were not necessary. The
suggestion ( page 27, last paragraph, line 4) t h a t AORCC " overestimated' administrative
costs is inaccurate.
2. The LWCF grant- in- aid program is a reimbursement/ match program. While a
grant recipient has a five- year period within which a project is to be completed and funds
expended, the time required t o process the billings and complete the necessary paper
work varies greatly with each project. Assessing a surcharge at the time of billing or
periodically throughout t h e l i f e of the project would not change the total funds available
for administrative costs. The reimbursement process is a diminishing one and would not
lend itself to a dependable level of income over time.
3. At any point i n t i m e when the LWCF program is completely terminated, t h e
federal requirements for comprehensive planning and grants administration will also be
revised. This will, in turn, alter the amount of funds necessary to administer t h e remain-ing
grants contracts. The amount of money received through the utilization of the
indirect cost method, as described in the second paragragh on page 28, was expended t o
cover costs incurred in updating the SCORP and not for administrative expenses. In
order to accomplish the 1983 SCORP Update, the Commission had the option of using
unexpended LWCF monies in this way or submitting an LWCF project for matching
assistance which would have had t h e same result. I t should not be concluded, therefore,
that AORCC used grant monies twice t o generate administrative funds.
A comprehensive project status report was completed; hbwever, i t is impossible t o
determine beforehand the difficulties a grant recipient might have during the course of
completing a project nor the time necessary t o review closure documentation. The
amount of dollars allocated t o a project is not an indicator of the amount of time
necessary t o process the corresponding paperwork. An average cost could be determined
by analyzing completed projects. This would, however, only be an indicator of what
might be expected but not a reliable estimate of actual needs.
The surcharge r a t e is re- evaluated annually. This assures not only the grant
recipient of a " fair share" assessment but also that the reserved funds are reasonable and
prudent.
111. AORCC has failed t o effectively meet several S t a t e and federal requirements.
The audit report identifies two areas of concern for meeting s t a t e statutory
mandates and one federal programmatic requirement.
1. The S t a t e statutes require AORCC to prepare and keep up- to- date a compre-hensive
plan for the development of the outdoor recreation resources of the State. The
effectiveness with which AORCC has fulfilled t h i s mandate is a matter of opinion, as
plans have been developed and periodically updated. The only funding support f o r t h e s e
efforts has come through the participant surcharge assessed against LWCF grant
recipients and matched with federal L WCF monies. The c r i t e r i a for the development of
a SCORP are outlined in the federal LWCF manual. AORCC has followed the federal
guidelines and met all the SCORP requirements mandated by NPS, as evidenced by the
attached l e t t e r s . In addition, AORCC has utilized various methods of assessing user
needs in an effort t o assure that the process is a true reflection of statewide needs. The
SCORP was not designed t o provide specific plans t o meet statewide needs as this is the
function of the local entity. Grant applications reflect these needs and become, in
essence, the implementation arm of the SCORP process.
The suggestion on page 32, second paragraph, that California's SCORP, which
includes proposed solutions to outdoor recreation " issuest', mare effectively addresses
statewide needs and problem solutions, overlooks the annual Action Program AORCC
adopts which, essentially, accomplishes the same objective.
The collection of user data, as discussed in the last paragraph of page 32, is a very
unstable and unreliable piece of information. The recording of such information is
usually at the discretion of the resource manager and no6 compiled uniformly by all
entities involved. To imply ( beginning with the last sentence of page 32) that AORCC
may have made incorrect grant decisions because user data was unavailable is an assump-tion.
The statement attributed t o AORCCts executive director found on lines 4, 5 and 6
of page 33 is taken out of context. The user data requested by t h e Commission in prep-aration
for FY1983- 84 project evaluations was collected, transmitted to commissioners
and considered by staff in the evaluation of each project. In addition, the LWCF project
rating system advisory committee concurred with a staff suggestion that further applica-tions
be required t o include this type of information.
It should be noted in response t o the report's reference t o Missouri's use of the
Delphi technique in the first line of page 34 that Arizona utilized the Delphi approach in
conducting the 1981 SCORP Needs Assessment update. However, at the conclusion of
the process, the Commission expressed dissatisfaction with the concept and directed
staff not to utilize i t for future needs assessment updates.
2. AORCC has corrected the method of keeping executive session minutes as
rerferenced in the audit report on page 36.
3. The federal programmatic requirement referred t o in the audit report, page 35,
is i n t h e process of being completed. The post- completion compliance inspections
referred t o in the last paragraph on page 35 are required of projects which have been
completed for over five years. AORCC recognized the need for completing this
requirement and scheduled inspections at a time when the workload priorities enabled
them to be accomplished. This schedule was agreed upon by both NPS and AORCC
staff. All inspections will be completed by AORCC staff by May 1, 1984. At no time
were LWCF reimbursement funds or future apportionments in jeopardy. As of this date
( April 20, 1984) 148 project inspections have been completed and reports are in the
process of being forwarded t o NPS. While Arizona may be the only s t a t e in the western
region to be so delinquent in this area, it is not the only state in the country which is
behind.
The Arizona Outdoor Recreation Coordinating Commmission, members and staff,
are very proud of t h e fine record the agency has established and the outstanding accom-plishments
of the planning and grants- in- aid aspects of both the LWCF and SLIF
programs. The administration of the BLESF program has also been exemplary. The
excellent rapport the Commission has established with local officials, as well as resource
managers, is envied by other agencies.
United States Dcpartmcnt of the Interior
NATJOSAL P' 4Rf; SEKVICE
\\ JESTERN REGlOhT
450 GOLDEN G. 4TE .?\' ENtiE. BOX 36063
IS REPLY R E F I R TO: SAX FKAYCISCO. CALIFORSl. 4 94102
1101- 02b Arizona
( WR- RG)
February 28, 1984
RECEIVED
MAR - 5 19@'
A O R C C
Plrs. Plary Alice Bivens
D i r e c t o r
Arizona Outdoor Recreation
Coordinating Commission
1624 West Adams, Room 101
Phoenix, Arizona 85007
Dear M r s . Bivens:
W e have completed our review of the 1983 Arizona Statewide Comprehensive Outdoor
Recreation P l a n Update. The plan meets t h e requirements of the Land and Water
Conservation Fund Act ( L& IJCF) and the N a t i o n a l Park Service ( NpS) Grants Ifanual.
W e a r e pleased t o approve the plan and to extend Arizona's e l i g i b i l i t y t o par-t
i c i p a t e i n the L& WCF program through February 28, 1989. Congratulations to you
and your s t a f f f o r a job well done.
For your information and use, we a r e enclosing a copy of our comments on the plan.
W e hope these comments w i l l be considered and used t o s t r e n g t h e n t h e documents
u t i l i t y as a s t a t e w i d e planning t o o l . Please l e t us know i f you have any questions
regarding t h e s e comments o r other c o n s i d e r a t i o n s i n f i n a l i z i n g t h e plan. Follow-i
n g t h a t , we look forward t o working with you i n the months ahead t o meet the
challenge of plan implementation.
S i n c e r e l y ,
/.;
U Regional D i r e c t o r , Western Region
Enclosures
Gnited States Department of the Interior
NATIOKAL PARK SERVICE
UTESTERN REGlOh'
450 GOLDEN GATE A\' ENLIE. BOX 36063
15 REPLY REFER TO:
April 13, 1984
h: r. Douglas R. h'orton
Auditor General, S t a t e o f Arizona
Ill \ Vest Monroe, S u i t e 600
Phoenix, Arizona 85003
Dear blr. Norton:
It has come t o my a t t e n t i o n i n a d r a f t report on the performance audit of the
Arizona Outdoor Recreation Coordinating Commission, th'at t h r e e o f f i c i a l s of
t h e National Park Service a r e quoted as having s t a t e d t h a t Arizona's Statewide
Comprehensive Outdoor Recreation Plan ( SCORP) planning e f f o r t s are performed
s o l e l y f o r t h e purpose of obtaining e l i g i b i l i t y f o r Arizona t o p a r t i c i p a t e i n
t h e Federal Land and IYater Conservation Fund Program. Statewide Comprehensive
Outdoor Recreation Plans were first required of s t a t e s i n order t o provide a!
b a s i s for g r a n t i n a i d decisions. Since t h a t time most s t a t e s , including
Arizona, have recognized the values of statewide, comprehensive and long- range
outdoor r e c r e a t i o n planning and expanded t h e i r SCORP e f f o r t s beyond those
s p e c i f i c requirements f o r e l i g i b i l i t y . I want t o assure you t h a t Arizona
does meet f e d e r a l requirements and guidelines and has been commended for a
job well done. The moratorium on funding i n 1981 made it d i f f i c u l t f o r s t a t e s ,
l i k e Arizona who r e l y on federal funds, t o produce a q u a l i t y document without
o b t a i n i n g F e d e r a l matching d o l l a r s . The Arizona Outdoor Recreation Coordinating
Commission was not i d l e during t h i s time as supported by t h e i r annual report,
and did, i n f a c t , work on components which have been incorporated i n t o the
r e c e n t l y approved 1987 Update.
\ Ce would l i k e t o assure you t h a t the " three NPS o f f i c i a l s " quoted i n the d r a f t
document a l l recognize t h a t Arizona has developed Statewide Comprehensive
Outdoor Recreation planning documents which r e f l e c t concern f o r statewide
i s s u e s and needs. These documents evidence t h a t they were produced t o be an
a i d i n outdoor r e c r e a t i o n decisions and indeed we believe have benefited the
people of Arizona.
Sincerely.
8
John D. Cherry
V Associate ~ e ~ i o n Da ilr ector
Resource Management and Planning
8 cc: d~. laryA lice Bivens
Director, Arizona Outdoor
Recreation Coordinating Commission
RECEIVED
APR 1619ert - .,
A O R G C '