Performance Audit, Department of Corrections, administrative activities

              DOUGLAS R NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
July 1, 1986
Members of the Arizona Legislature
The Honorable Bruce Babbitt, Governor
Samuel A. Lewis, Director
Department of Corrections
Transmitted herek! i t h is a report of the Auditor General, a Performance Audit
of the Department of Corrections, Administrative Activities. This report i s
in response to the July 26, 1385 resolution of the Joint Legislative Oversight
Committee.
The report addresses deficiencies i n three administrative areas. We found
that the Department's vehicles are poorly maintained and unreliable. As a
result, the cost of operating Departmental vehicles may be unnecessarily
high. We also found that the Department has not made sufficient use of
contracts for maintenance supply purchases. Although contract purchases
reduce costs for many needed supplies, the Department i s unable to accrue
savings which could resul t from greater contracting maintenance suppl ies.
Finally, we found that the Department needs to improve planning for and
development of i t s electronic data processing systems.
My staff and I will be pleased to discuss or clarify i tems i n this report,.
Staff: William Thomson
Mark Fleming
Jayne M. Hewitt
Anthony J . Guari no
Edward J. Corey, Jr.
Joseph D. Moore
Respectfully submitted,
R. Norton
Auditor General
2700 NORTH CENTRAL AVE. SUITE 700 8 PHOENIX, ARIZONA 85004 8 ( 602) 255- 4385
The Office o f the Auditor General has conducted a performance audit o f the
Arizona Department of Corrections ( DOC) administrative a c t i v i t i e s . This
a u d i t was conducted i n response to a July 26, 1985, resolution of the
J o i n t Legislative Oversight Committee, and i s one i n a series o f audits on
the Department.
Previous audit reports have addressed DQC's problems i n several functional
areas i n c l uding new f a c i l i t i e s planning and construction, external and
i n t e r n a l security a t a d u l t i n s t i t u t i o n s , i n s t i t u t i o n a l f a c i l i t i e s
maintenance programs, and i n s t i t u t i o n a l s e c u r i t y s t a f f i n g . I n addition,
an audit i s c u r r e n t l y being completed on DOC's contracting process f o r
professional and ou t s i de services.
The Department O f Corrections Vehicle F l e e t
I s Poorly Maintained ( see pacjes 3 through 17)
DOC's vehicle f l e e t i s i n poor condition. Many DOC vehicles have been
driven more than 100,000 miles and are more than 10 years old,
c o n t r i b u t i n g t o vehicle operating costs t h a t are more than 46 percent
above the operating costs f o r an e f f i c i e n t f l e e t . As a r e s u l t , DOC spent
$ 443,370 more f o r vehicle operations i n f i s c a l year 1984- 85 than it would
have with a cost e f f i c i e n t f l e e t . I n addition, the need f o r frequent
repairs requires DOC to maintain an unnecessarily large fleet. DOC has
more vehicl es per s t a f f than several 1 arger corrections agencies. For
example, the I 1 1 i n o i s Department o f Corrections r a t i o o f s t a f f to vehicles
i s 13 to one, while DOC has s i x s t a f f for each vehicle. The poor
condition o f some DOC vehicles a1 so makes them unsafe and unreliable. For
example, i n August 1984 a DOC bus transporting inmates was involved i n an
accident when the a i r brakes and emergency brakes f a i l e d . The bus h i t the
rear o f a vehicle stopped i n t r a f f i c . One passenger i n the vehicle
complained of severe neck pain and sued the State.
To improve i t s f l e e t , DOC should establ ish Department- wi de pol i c i e s
requiring t h a t the i n s t i t u t i o n s conduct preventive maintenance and
evaluate f l e e t effectiveness i n terms o f cost per mile. The Department
should a1 so upgrade i t s maintenance f a c i l i t i e s by paving garage areas and
obtaining s u f f i c i e n t and proper vehicle r e p a i r equipment. Once DOC has
establ ished a preventive maintenance program and improved i t s f a c i l i t i e s ,
the Department shoul d establ i s h vehicl e rep1 acement pol i c i e s and purchase
newer vehicl es.
The Department Could Save Between $ 192,000 And
$ 328.000 A Year BY Contractinq For More O f I t s
Maintenance suppl3es ( see pages 19 through 26)
Increased term contracting f o r maintenance suppl ies could save the
Department between $ 1 92,000 and $ 328,000 annual ly. DOC has not obtained
these potential savings since it contracts f o r only 30 percent o f i t s
routine maintenance suppl ies. The 1 ow percentage o f contracted purchases
has occurred because few DOC i n s t i t u t i o n s use term contracts for
maintenance supplies. For example, seven DOC i n s t i t u t i o n s purchased
approximately $ 60,000 i n suppl ies from the same major plumbing vendor
during f i s c a l year 1984- 1985 w i t h o u t t h e b e n e f i t o f a term contract.
DOC could purchase up to 90 percent o f i t s maintenance supplies on
contracts and save 15 t o 25 percent o f the purchase price. For example,
DOC could have saved between $ 192,000 and $ 325,000 during f i s c a l years
1983- 1984 and 1984- 1985, as shown i n the table on the followirig page.
Increased use o f contracts could also save time f o r DOC'S purchasing
personnel.
A1 though DOC o f f i c i a l s argue t h a t contracting i s the responsibil i ty o f the
Department of Administration, maintenance suppl ies are the one major
commodity not on statewide contract. DOC could reduce costs f o r these
suppl ies by pl acing greater emphasis on contracting. The Department could
do t h i s by using the Department o f Administration's new automated
procurement system once it comes on- 1 ine. In the i n t e r i m , DOC should
require the i n s t i t u t i o n s to establ ish general requirements coritracts f o r
a l l i n s t i t u t i o n a l maintenance suppl ies.
POTENTIAL SAVINGS WITH ADEQUATE CONTRACTING
FISCAL YEARS 1983- 84 AND 1984- 85
Fiscal Year Fiscal Year
1 983 - 84 1 984 - 85
Total maintenance
supply purchases $ 1,907,000 $ 2,141,000
Less purchases:
Currently on contract 439,000
Not amenable o
contracts ( 1 j
Potenti a1 contract
purchases $ 1,277,000 $ 1,312,000
Savings a t 15 percent
Savings a t 25 percent
( 1 ) Purchases not amenable to term contracting include one- time
purchases, special order items, such as repair parts from an
equipment's original manufacturer, and emergency repair suppl ies.
Source: Compiled by Auditor General s t a f f w i t h DOC maintenance expenditure
data from the Arizona Financial Information System and vendor
information provided by DOC purchasing agents
The Department Of Corrections Needs To Improve
Pl annincr For And Develo~ nlent Of I t s Electronic
Data ~ r o c e s s i nsy~ s tems' ( see pages 29 through 42)
The Department needs to improve planning for and development of its
electronic data processing ( EDP ) systems. Proper pl anni ng and control i s
cri tical to ~ e v eolp ing optimal EDP xys tenrs. However, as the fol 7 owing
exampl es show, DOC has not adequately pl anned i ts EDP systems.
DOC'S f i r s t on- line offender information system, Ck- IVY aia not
meet the Department's needs despite the fact that DOC expended
$ 80,000 and ten months of effort.
e The Adult Information Management System's ( AIMS) i n i t i a l budget
request was exceeded by a t l e a s t $ 537,535, or 50 percent.
Further, because of time limitations imposed by the
appropriations process, DOC compromised on the accuracy of data
i n p u t into AIMS. Concerns about inaccurate data are causing some
AIMS users to rely more heavily on written documents than on AIMS.
a DOC'S most recent budget request for an automated accounting
system was prepared w i t h insufficient knowledge of the
Department's needs and a1 ternati ve accounting systems that can
meet those needs.
DOC has many functions that may benefit from automation, however, the
Department needs to develop the capability to effectively plan for future
systems. DOC has far fewer EDP resources than other State agencies, as
shown i n the table below. In addition, DOC lacks a Department- wide EDP
pl an that priori tizes future system devel oprnent. Final ly, the Department
has not establ ished standards for system devel opment. Standards are
necessary to ensure that EDP problems and solutions are thoroughly
investigated before funding is requested for new EDP systems.
COMPARISON OF EDP BUDGETS AND PERSONNEL
FISCAL YEAR 1985- 86
E DP % of Agency E CP % of Agency
Department - FTEs FTEs Budget Budget
Corrections 17 0.4% $ 1,313,070 0.8%
Pub1 i c Safety 5 2 3.3% $ 3,361,908 4.7%
Transportation 132 4.5% $ 6,212,278 4.6%
Economic
Security ( 1 61.5 2.3% $ 6,586,600 3.2%
) Includes State funded FTEs and monies only. Federal nionies support
an additional 155.5 FTEs and provide an additional $ 10 million to
the DES Office of Data Administration.
Source: Compiled by Auditor General s t a f f from data obtained from DOC,
DPS, ADOT, DES and the 1985 Arizona Appropriations Report
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND . . . . . . . . . . . . . . . . . .
FINDING I: THE DEPARTMENT OF CORRECTIONS VEHICLE FLEET
IS POORLY MAINTAINED . . . . . . . . . . . . . . . . . . .
DOC's Vehicles Are Expensive To Maintain And Unreliable . . . . . . . . . . . . . . . .
DOC Lacks An Adequate Maintenance Program . . . . . . . . .
Vehicle Maintenance I s Hindered By
Inadequate Maintenance F a c i l i t i e s . . . . . . . . . . . . .
Vehicle Maintenance I s Compl icated By
The Purchase O f Old Vehicles . . . . . . . . . . . . . . .
Recommendations . . . . . . . . . . . . . . . . . . . . . .
FINDING I I: THE DEPARTMENT COULD SAVE BETWEEN $ 192. 000
AND $ 328. 000 A YEAR BY CONTFACTING FOR kORE OF ITS
MAINTENANCE SUPPLIES . . . . . . . . . . . . . . . . . . .
Inadequate Contracting Resul t s I n
Higher Costs For Maintenance Supplies . . . . . . . . . . .
DOC Needs To Place Greater
Emphasis On Contracting . . . . . . . . . . . . . . . . . .
Recommendations . . . . . . . . . . . . . . . . . . . . . .
FINDING 111: THE DEPARTMENT OF CORRECTIGNS NEEDS
TO IMPROVE PLANNING FOR AND DEVELOPMENT OF
ITS ELECTRONIC DATA PROCESSING SYSTEtiS . . . . . . . . . .
EDP Planning And Control Are C r i t i c a l . . . . . . . . . . .
DCC Has Not Adequately Planned I t s EDP Systems . . . . . .
DOC'S Use Of EDP Systems I s Limited . . . . . . . . . . . .
Recommendations . . . . . . . . . . . . . . . . . . . . . .
Page
1
TABLE OF CONTENTS
Page
OTHER PERTINENT INFORMATION . . . . . . . . . . . . . . . . . . 4 3
AREAS FOR FURTHER AUDIT UORK. . . . . . . . . . . . . . . . . . 45
DEPARTMENT RESPONSE . . . . . . . . . . . . . . . . . . . . . . 49
APPERDIX
Methodology For Determining Vehicle Operating Costs
LIST OF TAbLES
Page
TABLE 1 - Full- Time Positions
A t DOC'S Phoenix Office, October 1985 . . . . . . . . .
TABLE 2 - DOC I n s t i t u t i o n s Actual Vehicle
Operating Costs Versus Criterion
Costs, Fiscal Year 1984- 85. . . . . . . . . . . . . . .
TABLE 3 - Comparisons Of Correctional Fleet Size. . . . . . . . .
TABLE 4 - Comparison Of Preventive
Maintenance Programs. . . . . . . . . . . . . . . . . .
TABLE 5 - Potential Savings With Adequate
Contracting, Fiscal Years 1 983- 84
And 1984- 85 . . . . . . . . . . . . . . . . . . . . . .
TABLE 6 - AIMS Approximate Expenditures
Fiscal Year 1984- 85 . . . . . . . . . . . . . . . . . .
TABLE 7 - Comparison Of EDP Budgets And Personnel Fiscal Year 1985- 86 . . . . . . . . . . . . . . . . . .
LIST SF FIGURES
FIGURE 1 - Contract And Noncontract Purchases
Fiscal Years 1983- 84 And 1984- 85 . . . . . . . . . . .
INTRODUCTION AND BACKGROUND
The O f f i c e of the Auditor General has conducted a performance auait o f the
Arizona Department o f Corrections ( DOC ) a d m i n i s t r a t i v e a c t i v i t i e s . This
a u d i t was conducted i n response to a July 26, 1985, r e s o l u t i o n o f the
J o i n t L e g i s l a t i v e Oversight Committee, and i s one i n a s e r i e s o f audits on
the Departnen t.
Previous a u d i t reports have addressed problems i n several functional areas
including new f a c i l i t i e s planning and construction, external and i n t e r n a l
s e c u r i t y a t adul t i n s t i t u t i o n s , i n s t i t u t i o n a l f a c i l i t i e s maintenance
programs, and i n s t i t u t i o n a l s e c u r i t y s t a f f i n g . I n addition, an a u d i t i s
c u r r e n t l y being completed on DOC ' s contracting process f o r professional
and outside services.
DOC ' s A d m i n i s t r a t i v e Function
DOC ' s Director i s responsible f o r managing the Department's o v e r a l l
operation. In order t o accomplish t h i s task, the D i r e c t o r has support o f
the s i x Assistant Directors ana other auministrators, 1 ocated a t DOC ' s
Central Office i n Phoenix. DOC's Administrative Services D i v i s i o n
provides the m a j o r i t y o f the Departcrent's support services. The Division
provides support t o a l l other d i v i s i o n s i n terms o f budget development ana
control, purchasing, and management irrformation systems. In adai tion, the
Administrative Services D i v i s i o n oversees DOC's equipment inventory
i n c l uding the Department's vehicles inventory. Currently however, there
i s no central oversight o f DOC's vehicle management.
S t a f f i n g And Budget
The Department has approximately 285.5 f u l l - time equival ent ( FIE)
positions working from the Phoenix Office, as shown i n Table 1.
TABLE 1
FULL- TIME POSITIONS AT DOC ' s PHOENIX OFFICE
OCTOBER 1985
Adul t I n s t i t u t i o n s
Human Resources/ Devel opmen t
A d m i n i s t r a t i v e Services
Juveni 1 e/ Communi ty Services
Inspections 8 I n v e s t i g a t i o n s
D i r e c t o r ' s O f f i c e
ARCOR
TOTAL
FTE POSITIONS
Source: Prepared by Auditor General s t a f f from information provided by
DOC's Bureau o f Budget and Management
Audit Scope And Purpose
The a u d i t r e p o r t focuses on the Department's a b i l i t y to perform i t s
a d m i n i s t r a t i v e a c t i v i t i e s e f f i c i e n t l y and e f f e c t i v e l y . The r e p o r t
presents f i ndinys and recomnenaations i n three major areas:
a the adequacy o f DOC's v e h i c l e f l e e t management,
a t h e e f f e c t i v e n e s s o f DOC's purchasing o f r~~ aintenancseu pplies, and
a t h e a b i l i t y o f D O C t o d e v e l o p a n d i m p l e m e n t a u t o m a t e d s y s t e m s .
We also developed other p e r t i n e n t information regarding the Departnent's
organizational s t r u c t u r e and management. Due t o the time constraints, a1 1
p o t e n t i a l issues i d e n t i t i e d during the a u d i t have not been addressed. Tile
section Areas For Further Audit Work describes these p o t e n t i a l issues.
The Auditor General and s t a f f express appreciation t o t h e D i r e c t o r of the
Department of Corrections and h i s s t a f f for t h e i r cooperation and
assistance during the audit.
FINDING I
THE DEPARTMENT OF CORRECTIONS' VEHICLE FLEET IS POORLY MAINTAINED
The Department o f Corrections' ( DOC) vehicle f l e e t i s i n poor condition,
which has resulted i n high operating costs. DOC's vehicles are not cost
e f f i c i e n t because of inadequate vehicle maintenance programs and
f a c i l i t i e s . The lack o f maintenance i s p a r t i c u l a r l y c r i t i c a l because many
vehicles are already o l d and beyond t h e i r useful 1 ives when acquired by
DOC.
DOC's Vehicles Are Expensive
? o Maintain And Unreliable
DOC's i n s t i t u t i o n a l f l e e t i s not cost e f f i c i e n t . Because many vehicles
are old, extensive repairs are needed t o keep them i n service. Despite
extensive repairs, some o f DOC's f l e e t i s unsafe and unreliable.
DOC vehicles require c o s t l y repairs - The poor condition o f DOC's f l e e t
has resulted i n h i g h v e h i c l e operating costs. Because rrrany of GOC's
vehicles are o l d and have high mileage, extensive repairs are needed which
r e s u l t i n high operating costs. I n addition, since a p o r t i o n o f DOC's
f l e e t i s always being repaired, additional vehicles are needed, thus
c o n t r i b u t i n g t o an unnecessarily l a r g e f l e e t .
Much o f DOC's i n s t i t u t i o n a l vehicle f l e e t i s antiquated and has hign
mileage. Almost one- third o f the i n s t i t u t i o n a l vehicles are 10 years o l d
or older. Further, more than 40 percent o f the i n s t i t u t i o n a l vehicles
have been driven more than 100,000 miles.
The age and high mileage o f DOC's vehicles contribute to vehicle operating
costs t h a t are more than 46 percent above the operating costs f o r an
e f f i c i e n t f l e e t . DOC vehicle operating costs were approximately
$ 1,397,100 f o r f i s c a l year 1984- 85. If DCC's f l e e t were operating
e f f i c i e n t l y , i t s t o t a l operating costs would have been approximately
$ 953,735. The cost for an e f f i c i e n t f l e e t was determined by obtaining
operating cost data from the National Association o f Fleet Administrators,
the Department o f Administration ( DOA) Motor Pool, the Arizona Department
o f Transportation ( ADOT) and the City o f Phoenix.* While three DOC
i n s t i t u t i o n s expended less than the amount necessary f o r an e f f i c i e n t
f l e e t , other expenditures were extremely high, as shown i n Table 2. DOC
expended a t l e a s t $ 443,370 more than it would have i f the f l e e t were
operating e f f i c i e n t l y .
TABLE 2
DOC INSTITUTIONS ACTUAL VEHICLE OPERATING
COSTS VERSUS CRITERION COSTS
FISCAL YEAR 1984- 85
ASPC- Fl orence
ASPC- Phoenix
ASPC- Perryvil 1 e
ASP- Safford
ASPC- Tucson
ASP- Ft. Grant
Adobe Mountain
Juvenile I n s t i t u t i o n
Catalina Mountain
Juvenile I n s t i t u t i o n
Actual Vehicle C r i t e r i o n Vehicle
Operating Costs Operating Costs Variance
Totals
Source: Compiled by Auditor General s t a f f from sources as shown i n the
Appendix.
DOC'S high operatins costs r e s u l t p a r t i a l l y from the need f o r exterisive
vehicle repairs. An Auditor General review o f DOC'S vehicle f l e e t
i d e n t i f i e d the f o l l owing examples o f DOC expenditures.
* See the Appendix f o r ~ e t a i l e d information on how IjOC's v e t ~ i c l e
operating costs and c r i t e r i o n operating costs were determined.
0 Arizona State Prison Compl ex ( ASPC )- Phoenix expended
approximately $ 12,000 i n 1985 to overhaul the engine i n a 1964
transport bus. I n addition, i n 1986 DOC expended approximately
$ 4,000 f o r other major r e p a i r s on t h i s bus. According to a
Phoenix bus vendor, the market value o f a s i m i l a r bus i n good
condition i s between $ 6,500 and $ 11,000. However, t h i s bus has a
h i s t o r y o f brake, steering and c l u t c h problems. I n addition, the
bus chassis i s worn out and may pose a safety threat. The
extensive r e p a i r s t o keep t h i s bus operating combined with the
p o t e n t i a l ly unsafe chassis i n d i c a t e t h a t t h i s bus may warrant
rep1 acemen t.
Arizona State Prison ( ASP)- Ft. Grant replaced the engines i n 18
o f 92 ( 20 percent) vehicles i n i t s f l e e t during 1985. According
t o the vehicle maintenance supervisor, a t l e a s t 15 o f these
vehicles should be replaced because o f worn out d r i v e t r a i n s ,
suspension systems and other problems which may compronise the
v e h i c l e s ' safety. I n addition, these vehicles require extensive
r e p a i r s t o keep them running.
0 ASPC- Fl orence expended a t 1 east $ 1 , I 50 during 1985 f o r repairs t o
a 1968 cargo van used f o r mail d e l i v e r i e s . The maximum market
value o f a s i m i l a r vehicle i n good condition is- 0. Two
Phoenix area auto dealers strongly questioned the practice ~ f
spending $ 1,150 on t h i s vehicle.
@ ASPC- Florence expended a t l e a s t $ 3,330 i n 1985 to overhaul the
engine o f a 1982 refuse vehicle with only 35,000 miles. This
vehicle had i t s o i l changed only twice i n 1585 ( Flarch and
November). According t o a Phoenix area equipment dealer, t h i s
vehicle should have i t s o i l changed a t three monttl or 3,000 mile
i n t e r v a l s, whichever comes f i r s t . The 1 ack o f preventive
maintenance may have contributed t o the need f o r a major overnaul.
The need for frequent r e p a i r s a1 so causes DOC t o maintain an unnecessarily
l a r g e vehicle f l e e t . DOC's r a t i o o f s t a f f t o vehicles i s lower than
several much l a r g e r corrections agencies, as shown i n Table 3. For
example, both the I l l i n o i s Departlnent o f Corrections dnd the Federal
Prison System's r a t i o of s t a f f t o vehicles i s 13 t o one, while DOC's r a t i o
i s s i x t o one.
TABLE 3
Number o f
Number o f Number o f Fl eet S t a f f
I n s t i t u t i o n s S t a f f ( 2) Size ( 3) Per Vehicle
Arizona Department
o f Corrections 15 3,973 637 ( 4 ) 6
I l l i n o i s Department
o f Corrections 28 8,674 683 13
Fl o r i da Department
o f Corrections 2 9 8,699 850 10
Federal P r i son
Sy s tem 43 9,974 749 13
) The 11 1 i n o i s and F l o r i d a Departments o f Corrections were selected
f o r comparison on the recommendation o f the Commission o f
A c c r e d i t a t i o n f o r Corrections. The Federal Prison Systen~ was
selected because it was known t o have established vehicle
maintenance pol i c i es.
( 2 ) Totals i n c l u d e s t a f f a t a d u l t i n s t i t u t i o n s and j u v e n i l e
i n s t i t u t i o n s , where applicable.
( 3) Includes only i n s t i t u t i o n a l vehicles. Vehicles assigned t o Central
Office and regional a d m i n i s t r a t i v e o f f i c e s are excluded.
( 4 ) DOC has a t o t a l o f 699 v e h i c l e s excluding ACCDII. O f these vehicles,
637 are assigned t o DOC i n s t i t u t i o n s .
Source: Compil ed by Auditor General s t a f f frorn i n forrnatiori o b t a i n e ~ fror11
the American Correctional Association, s t a f f and vehicle figures
frorn o t h e r c o r r e c t i o n s agencies, and DOC'S vehicle inventory ana
information provided by DOC personnel
If DOC'S f l e e t were i n b e t t e r condition, fewer vehicles would be needed.
For example, a1 though Catal ina Mountain Juvenile I n s t i t u t i o n ( CMJI ) has
four perimeter s e c u r i t a vehicles, i n s t i t u t i o n s t a f f r e p o r t t h a t ofily " Lwo
are usua'lly operable a t any one time. The vehicles have extensive
mechanical problenis and a r e r e p a i r e d approxir~~ ateltyh ree t o f i v e tirnes a
week. DOC employees a t most i n s t i t u t i o n s have stated t h a t i f the vehicles
were dependable, fewer vehicles woul a be needed. Their statenients dre
supported by the r e s u l t s ARCOR r e c e n t l y achieved. ARCOR reduced i t s f l e e t
by r e p l a c i n g 68 old, wcjrn- out vehicles w i t h 25 new ones through a
1 ease- purchase agreement w i t h a 1 ocal 1 easi ny agent. The 1 easing company
spokesperson be1 ieves t h a t 50 t o 60 percent of DOC'S f l e e t could ue
eliminated if replaced w i t h new vehicles.
Some vehicles are unsafe and unreliable - In addition to being expensive
to operate, the poor condition of some DOC vehicles make then unsafe and
unreliable. Some DOC vehicles have been involvea in accidents because of
their poor condition.
0 On illay 12, 1984, a CSO on perimeter patrol a t ASPC- Florence l o s t
consciousness while driving a 1982 Plymouth. The driver was
apparently overcome by carbon monoxide fumes and passed out. The
vehicle drifted to the edge of the canal and was suspended on the
bank.
On Decenrber 26, 1985, a t ASPC- Tucson, a 1978 Chevrolet C- 10
pickup's l e f t door hinge failed, causing the door to open
abruptly while the vehicle was i n motion. The driver f e l l out of
the vehicle. The vehicle's t h r o t t l e stuck, and the truck
continued i n motion until i t struck a building. The driver
sustained minor i n j u r i e s t o h i s l e f t arm.
o On August 2, 1984, a 1464 GPIC bus transporting 12 inmates to
Southern Arizona Correctional Release Center was involved i n an
accident when the a i r brakes and emergency hand brake failed.
The bus h i t the rear of a vehicle stopped in t r a f f i c . The
vehicle had two passengers. The 12 inmates and two correctional
service officers ( CSO) were not injured, however, a passenger i n
the other vehicle complained of severe neck pain and sued the
State. The Department of Pub1 ic Safety ( DPS) investigating
officer concl uded that brake f a i l ure caused the accident.
Besides these accidents, we identified mechanical problems that coul d
jeopardize DOC empl oyees, inmates and the general pub1 ic safety. We
requested the ADOT safety team to conduct an inspection of transport
vehicles based a t ASPC- Phoenix." i n addition, we surveyed CSOs who drive
DOC vehicles for security and inmate transportation purposes to identify
vehicle incidents that could have resul teu i n injury or damage. CSOs and
the ADOT safety team identified several problems.
0 A 1962 35- passenger G ~ I C bus usecl for inmate transportation a t
ASPC- Phoenix- Alhambra has severe aamage to the main frame a t the
rear of the bus which supports the engine, transmission and drive
shaft. This bus i s i n such poor condition that a local bus
repair service refused to repair t h i s vehicle and recofimended
* The ADGT safety team conducts inspections on large vehicles traveling
through the State. The Office of the Auditor General asked the safety
team to inspect the ASPC- Phoenix transport f l e e t .
t h a t it be scrapped. Despite the f a c t t h a t the bus repair
service refused t o r e p a i r the v e h i c l e because o f concerns t h a t it
would s t i l l be unsafe, DOC i s having the bus repaired by another
1 ocal bus mechanic.
A 1964 39- passenger GNC bus used f o r inmate transportation was
found t o have severe main frame damage when inspected by the ADOT
safety team the day a f t e r it returned from a transport
assignment. The safety team recommended t h a t t h i s bus be
thoroughly inspected and repaired by q u a l i f i e d bus mechanics
before it i s taken out on the road. I n addition, t h i s bus was
i d e n t i f i e d by CSOs as having a h i s t o r y o f steering, brake, c l u t c h
and e l e c t r i c a l probl ems. Because o f the e l e c t r i c a l systern
malfunctions, CSOs have refused t o d r i v e the vehicle, fearing
t h a t it might catch f i r e .
e A 1979 Chevrolet van used f o r inmate transportation a t
ASPC- Phoenix- Alhambra had major wiring, power steering and brake
problems. Due t o the v e h i c l e ' s poor condition, the ADOT safety
team recommended t h a t t h i s vehicl e be compl e t e l y repaired before
leaving the Motor Pool.
e A 1972 Dodge bus used f o r inmate transport a t ASP- Ft. Grant has
jumped out o f gear a t l e a s t f i v e times since November 1985. I n
one instance, the bus was t r a v e l i n g on a mountain highway and the
d r i v e r coasted downhill for about one- half mile before the
transclission was reengaged. The d r i v e r be1 ieved he woul d have
had a d i f f i c u l t time avoiding an accident if another vehicle ttad
been i n f r o n t o f the bus.
Vehicle ma1 functions could place the State i n a p o s i t i o n of being l i a b l e
for i n j u r i e s . For example, i n 1982 two buses t r a n s p o r t i n g inmates from
ASP- Safford t o ASPC- Florence were almost involved i n a c o l l i s i o n when the
l i g h t s went out i n the lead bus. The d r i v e r of the second bus had t o stop
suddenly t o avoid a c o l l i s i o n . Five inmates claimed t o be i n j u r e d i n the
i n c i d e n t and have sued the state.
DOC Lacks An Adequate
Maintenance Proqram
A1 though many DOC vehicles require exterisive maintenance, DClC has not
imp1 emented a s u f f i c i e n t f l e e t maintenance program. DOC has not
establ i shea standardized preventive maintenance requi renients for the
i n s t i t u t i o n s . In addition, a1 1 but one DOC i n s t i t u t i o n 1 ack necessary
information to eval uate vehicl e performance.
Lack o f complete preventive maintenance program - DOC has not established
standardized vehicle maintenance requirements f o r the i n s t i t u t i o n s .
Because no central pol i c y on vehicl e maintenance exists, the i n s t i t u t i o n s
are allowed to determine maintenance standards. As a r e s u l t , three DOC
i n s t i t u t i o n s have not imp1 emented preventive maintenance programs and
three o n l y established preventive maintenance programs during the course
of our audit. I n contrast, some Arizona State agencies and other
corrections agencies ' have establ ished comprehensive preventive
maintenance standards.
Preventive maintenance i s an important p a r t o f a maintenance program, It
involves planning f o r regul a r l y scheduled inspections, maintenance and
adjustments o f equipment t o i d e n t i f y and c o r r e c t probl enis early. The
preventive maintenance inspection i s t y p i c a l ly s p e c i f i e d on a checkl i s t .
Preventive maintenance checkl i s t s are necessary a t DOC f o r two reasons.
1) They document the maintenance conducted on a vehicle; and 2) They
ensure c o n t i n u i t y i n the maintenance performed. Inmates do the m a j o r i t y
o f maintenance, and they a r e f r e q u e n t l y moved t o d i f f e r e n t i n s t i t u t i o n s or
discharged from DOC. Preventive maintenance i n c l udes, b u t i s not 1 ini tea
to, r o u t i n e l y changing o i l and 1 ubricants, inspecting t i r e s , and
s e r v i c i n g brakes and transmissions. This inspection and irraintenance i s
designed t o f o r e s t a l l the need for major r e p a i r or replacement, and t o
ensure t h a t vehicles remain operable and e f f i c i e n t .
DOC has not establ ished Departmental vehicle preventive maintenance
pol i c i e s t o ensure t h a t the i n s t i t u t i o n s adequately maintain vehicles.
A1 though DOC Central Office o f f i c i a l s d r a f t e d v e h i c l e preventive
maintenance pol i c i e s i n e a r l y 1985, these pol i c i e s were not iniplementea
due t o organizational changes i n Central Office. While the d r a f t pol i c i e s
were very general and d i d n o t specify when preventive maintenance should
be completed, they i d e n t i f i e d the need for a ~ epartrnental vehicle
maintenance program.
Because Central Office does not require the i n s t i t u t i o n s to meet
preventive maintenance standards, the adequacy of vehicle maintenance
programs varies among DOC i n s ti t u t i o n s . Only two ins ti t u t i o n s conduct
complete programs f o r s e r v i c i n g t h e i r vehicles on a regul ar basis.
e ASPC- Tucson and ASP- Safford have compl ete preventive maintenance
programs. Each i n s t i t u t i o n conducts preventive maintenance every
3,000 miles and uses preventive maintenance servicing checklists.
Other DOC i n s t i t u t i o n s have no program a t a l l or have established
preventive maintenance programs o n l y r e c e n t l y .
ASPC- Fl orence ( DOC'S 1 argest i n s t i t u t i o n which has 126 vehicles) ,
Adobe Flountain and Catal i na Mountain Juveni 1 e I n s t i t u t i o n s do not
have any form o f scheduled vehicle maintenance. These three
i n s t i t u t i o n s r e p a i r vehicles only when they break down.
a ASPC- Perryvil 1 e, ASPC- Phoenix and ASP- Ft. Grant a1 1 establ ished
preventive maintenance programs i n December 1985. During the
i n i t i a l phase of the a u d i t none o f these i n s t i t u t i o n s had
preventive maintenance prog rams. Because the programs were only
recently established, we were unable t o f u l l y evaluate them.
However, the ASPC- Perryville program may n o t be adequately furiaed
since the program has been suspended twice since i t s inception.
S i m i l a r l y , ASPC- Phoenix has not been able t o n~ eet i t s preventive
maintenance schedule due t o inadequate funds and s t a f f . Final ly,
both ASP- Ft. Grant and ASPC- Phoenix' s programs 1 ack preventive
maintenance check1 i s t s t o guide and document the inspection and
repai rs.
I n contrast to most DOC i n s t i t u t i o n s , other agencies have establ isiiea
pol i c i e s t h a t specify preventive maintenance standards t h e i r d i v i s i o n s
must meet. DOA and ADOT have cornpl ete preventive maintenance programs, as
do several o t h e r c o r r e c t i o n s systems. These comprehensive preventive
maintenance programs are c a r r i e d o u t when vehicles accumulate a speci f i c
number o f miles or a c e r t a i n time period elapses, as shown i n Table 4. I n
a d d i t i o n , c o r r e c t i o n s agencies shown i n Table 4 have more s t r i n g e n t
preventive maintenance standards than Arizona State agencies, which lnay
r e f l e c t t h e i r need t o have r e l i a b l e vehicles a t a l l times.
TABLE 4
COMPARISON OF PREVENTIVE MAINTENANCE PROGRAMS
DOA Motor Pool
ADOT
F l o r i d a Dept. of Corrections
Federal Prison System
Preventive Maintenance Schedul e
Every four months or 4,000 miles
Every three rrionths or 3,000 miles
Every two months or 2,500 miles
Every two months or 2,000 miles
Source: Compiled by Auditor General s t a f f from information obtained from
other state and corrections agencies ' preventive maintenance
programs
DOC coul d decrease costs by imp1 ernen t i n g an e f f e c t i v e preven ti ve
maintenance program a t a1 1 i n s t i t u t i o n s . For exampl e, ASPC- Fl orence
replaced the engines on two r e l a t i v e l y new vehicles - a 1981 pickup with
only 63,000 miles and a 1983 pickup with only 45,000 miles. These two
v e h i c l e s ' r e p a i r h i s t o r i e s show no evidence o f regular maintenance.
According to DOA's and ARCOR's f l e e t managers, the need f o r these major
r e p a i r s may be a t t r i b u t e d t o the lack o f preventive maintenance.
Inadequate information to evaluate vehicle performance - Iylost DOC
i n s t i t u t i o n s 1 ack information necessary to evaluate i n d i v i d u a l v e h i c l e
performance. A1 though vehicl e h i s t o r i e s are essential to sound fl eet
management, most DOC f a c i l i t i e s do not maintain adequate records t o
evaluate vehicle performance. I n contrast, other corrections agencies ana
some Arizona State agencies maintain comprehensive vehicle h i s t o r i e s .
Sound f l e e t manasenent requires t h a t d e t a i l e d information be maintained on
every vehicle i n a f l e e t . Necessary information includes each v e h i c l e ' s
maintenance h i s t o r y wilich tracks a1 1 r e p a i r s made on t h a t vehicle. Repair
h i s t o r i e s also serve as a control f o r v e h i c l e r e p a i r s and a s s i s t i n
p r o j e c t i n g f u t u r e r e p a i r s and expenses. In addition, fuel and o i l
consumption needs t o be monitored f o r c a l c u l a t i o n of a v e h i c l e ' s operating
costs t o determine whether each venicl e i s cperating e f f i c i e n t l y .
. Another benefit o f maintenance h i s t o r i e s i s t h a t they a s s i s t managers i n
c o n t r o l l i n g vehicle maintenance funds. DOC and DPS are currently
i n v e s t i g a t i n g the possible misuse o f vehicle maintenance funds by an
ASPC- Perryvill e empl oyee i n 1984. This misuse o f vehicle maintenance
funds may have been avoided i f vehicle h i s t o r i e s were maintained, because
vehicle h i s t o r i e s establish an a u d i t t r a i l t h a t i d e n t i f i e s a l l r e p a i r
costs.
A1 though vehicle h i s t o r i e s have several benefits, most DOC i n s t i t u t i o n s
have not maintained s u f f i c i e n t records t o evaluate f l e e t performance.
Two i n s t i t u t i o n s , AM1 and CrUI, do not keep vehicle maintenance
h i s t o r i e s .
e Several i n s t i t u t i o n s ' vehicle h i s t o r i e s are incompl ete.
ASPC- Phoenix, ASP- Ft. Grant, ASP- Safford, ASPC- Florence and
ASPC- Perryvill e keep r e p a i r h i s t o r i e s . However, the records do
not include a l l costs associated with repairs and fuel
consumption. I n addition, mileage a t several of these
i n s t i t u t i o n s i s not consistently recorded.
I n contrast t o most DOC i n s t i t u t i o n s , ASPC- Tucson keeps conlpl ete vehicle
h i s t o r i e s and tracks monthly gas consumption and mileage. This
i n s t i t u t i o n ' s method o f recording vehicle operating costs and m i 1 ease
could be used by other DOC i n s t i t u t i o n s . ASPC- Tucson, however, needs to
summarize m i 1 eage f o r each vehicle and eval uate vehicle performance ity
cal cul a t i ng operating costs per m i l e.
Other corrections agencies and Arizona State agencies also keep detailed
vchicl e h i stories. The I1 1 i n o i s Department of Corrections, the Federal
Prison System ( FPS), DOA Motor Pool and DPS keep txaintenance h i s t o r i e s
with the following information.
e Vehicle mileage when serviced
Date o f each service
e Type o f service performed
e Monthly and year- end mileage records
e Calculation o f vehicle miles per gallon
e Monthly and year- end fuel consumption reports
I n addition to keeping vehicle h i s t o r i e s , the agencies evaluate f l e e t
performance. FPS and DPS have implemented an automated system t h a t
compiles vehicle cost data t o determine the operating cost per vehicle and
for the t o t a l f l e e t . * DOA Motor Pool summarizes vehicle maintenance,
mileage and fuel consumption expendi tures monthly. As a resul t, monthly
operating expenses are c a l c u l ated on i n d i v i d u a l vehicles and the e n t i r e
f l e e t . This information i s used t o i d e n t i f y problem vehicles t h a t may
need t o be replaced.
Vehicle Maintenance I s Hindered By
Inadequate Maintenance F a c i l i t i e s
DOC'S a b i l i t y to perform vehicle maintenance i s hindered by inadequate
maintenance f a c i l i t i e s . Several DOC vehicle maintenance f a c i 1 i t i e s are
inadequate t o perform preventive maintenance and other repairs.
Inspections o f DOC maintenance f a c i l i t i e s reveal ed several deficiencies.
The maintenance garage a t ASPC- Florence i s inadequate. The
f a c i l i t y i s inadequately equipped because it has only two sets o f
hand t o o l s f o r seven mechanics. The body shop cannot De used due
t o inadequate v e n t i l a t i o n . The garage has a low clearance which
makes it impossible f o r large vehicles t o be maintained indoors.
In addition, ASPC- Florence does not have a l i f t f o r v e h i c l e
repairs.
The maintenance f a c i l i ty a t ASPC- Phoenix- A1 hambra was inspected
by the ADOT safety team and found t o be inadequate. The f a c i l i t y
i s not adequately equipped because it has too few hana t o o l s f o r
the inmate mechanics and no bus p i t f o r preventive maintenance
and r e p a i r . The f a c i l i t y i s housed i n an o l d t i n shed. The shed
has four s t a l l s ( two paved, two gravel ) where v e h i c l e s a r e
maintained and repaired. The f a c i l ity i s a1 so overcrowded and
has i n s u f f i c i e n t t o o l s and parts storage. According t o the
maintenance supervisor, s t a f f make approximately ten t r i p s per
day t o the auto p a r t s store.
e The maintenance f a c i l i t y a t ASPC- Perryville i s f u l l y exposed t o
the outdoors. There i s i n s u f f i c i e n t overhead cover f o r t h e four
mechanic bays. As a r e s u l t , w i t h excessive heat, blowing dust o r
r a i n , maintenance operations stop because the mechanics are n o t
protected. DOC requested $ 695,000 f o r f i s c a l year 1986- 87 to
b u i l d a maintenance f a c i l i t y , however, t h i s p r o j e c t was not
funded.
* The FPS automated system runs Cin a microcomputer. Total approxirilate
cost f o r the software and hardware i s $ 8,500. The software may also
be used f o r inventory management.
0 C N I ' s hand t o o l s needed f o r preventive riraintenance and major
r e 2 a i r s are o l d and worn- out.
DOC needs t o upgrade e x i s t i n g maintenance f a c i l i t i e s and equipment. The
maintenance garage areas and mechanic bays need t o be enclosed, paved and
have s u f f i c i e n t drainage. I n addition, proper shop equipment and t o o l s
are necessary f o r mechanics t o e f f i c i e n t l y carry out maintenance. The
ADOT safety team r e p o r t on the ASPC- Phoenix Motor Pool c i t e a t h a t
unenclosed and unpaved work areas can decrease p r o d u c t i v i t y and create
safety hazards. bloreover, the safety team stated t h a t proper equipment,
such as bus ramps, should be i n s t a l l e d so r e p a i r s can be completed e a s i l y
and safely.
Orle possible way t o upgrade the f a c i l i t i e s may be f o r DOC to e s t a b l i s h
regional maintenance f a c i l i t i e s f o r major repairs. I n June 1985, DOC
Bureau o f Management and Budget studied the f e a s i b i l i t y o f a regional
motor pool i n the Phoenix area. This study recommended e s t a b l i s h i n g a
central ized motor pool a t ASPC- Perryvil l e y however, the recommendations
had not been implemented as o f June 1986. I n May 1986, the Bureau o f
Management and Budget f u r t h e r s t u d i e d r e g i o n a l i z i n g vehicle maintenance
f a c i l i t i e s . This study recommended establ i s h i ng a regional maintenance
f a c i l i t y a t ASPC- Tucson f o r Ci4I1, the Southern Arizona Correctionai
Release Center and ASPC- Tucson. The r e p o r t a l s o i n d i c a t e d t h a t a d d i t i o n a l
equipment w i l l be necessary t o imp1 ement the recornmendation.
Vehicl e Llaintenance I s Compl i c a t e d
By Tile Purchase O f 01 6 V e i ~ i c l e s
Vehicle maintenance i s hindered by DOC'S purchases o f 07 d v e t ~ i ct- lS .
I n s t i t u t i o n s purchase many used vehicles b u t take few o u t o f service. I n
addition, DCC has not establ isnea rep1 acernent stanaaras f o r 01 d vehicles.
Purchase of used vehicles - DOC i n s t i t u t i o n s purchase many used vehicles
w h i l e r e t i r i n g few. I n IS85 DOC added 111 new and 61 used vekticles t o i t s
f l e e t , w h i l e r e t i r i n g only 18. DOC often purchases vehicles t h a t are f i v e
t o t e n years o l d , and cost from $ 100 f o r a car t o $ 70,000 for a bus.
Approximately 50 percent o f DOC'S vehicles for which informaticn i s
avai 1 able were purchased used. * For example, DOC purchased approximately
37 used vehicles i n the f i r s t ha1 f o f f i s c a l year 1985- 86. Many of the
used vehicles previously belonged to other State agencies and were
purchased from DOA- Finance D i v i s i o n ' s Surplus Property Section.**
Although DOC acquires used vehicles a t a low purchase price, some o f the
vehicles have exceeded t h e i r useful 1 ives and may n o t be safe or
re1 i a b l e. Some DOC employees feel t h a t purchasing and r e f u r b i s h i n g usea
vehicles i s more cost e f f e c t i v e than purchasing new vehicles. Because the
Department has not maintained complete r e p a i r records, we were unable to
f u l l y evaluate the costs and b e n e f i t s o f these two a1 ternatives. However,
available data suggest t h a t it rnay be more expensive t o operate used
veilicles than to purchase and operate new ones. DOA's f l e e t manager and a
f l e e t management p u b l i c a t i o n i n d i c a t e t h a t tne higher fuel economy o f
newer vehicles can provide substantial savings over the use o f less
e f f i c i e n t older venicles. Fuel cost makes up 5.6 cents o f the 7.6 cents
per mile average operating cost reported by the National Association o f
F l e e t Administrators f o r cars.
The fuel cost differences and the increased number o f repairs required oy
older vehicles can resui t i n s i g n i f i c a n t operating costs. For example, i n
f i s c a l year 1584- 85, venicl e operating costs f o r ASPC- Fl orence were
approximately $ 304,738. Thi s exceeds the c r i t e r i o n vehi c1 e operating c o s t
by $ 151,938. Further, as noted i n previous examples, many venicles zay
s t i l l not be safe or r e l i a b l e even a f t e r extensive repairs. Safety ancl
r e l i a b i l i t y pose r e a l b u t hidden costs t o be considered rillen isi ins old
vehicles.
* DOC'S current inventory dces not include information on c o n a i t i ~ n cf
vehicl es when purchased. The most recent information on purchase
condition i s available on a 1985 inventory. 394 of DOC'S 628 veilicles
l i s t e d on the 1985 inventory did not have condition or aate o f
p~ rchase completed. Therefore, the exact nurnDer of vetricles purci~ dsed
used cannot be determined.
** Further, a footnote t o tile lY8b- 67 appropriations act d i r e c t s the
Department o f Public Safety t o make available t o DOC, a t no cost,
vehicles t h a t waul a otherwise be auctioned.
Lack of vehicle replacement program - DOC has not established vehicle
replacement guide1 ines to r e t i r e old vehicles that perform poorly and are
costly to operate. Almost one- third of the institutional vehicles are ten
years old or older. In addition, more than 40 percent of the f l e e t have
more than 100,000 miles. The age and high mileage of DOC vehicles
combined w i t h the Department's high operating costs indicate that the
Department may need to replace many of i t s vehicles. ARCOR's f l e e t
manager, who has 26 years of f l e e t management experience including 16
years w i t h a major moving and storage company, stated that when a vehicle
has more than 80,000 miles and its operating costs exceed 16 cents per
mile, the vehicle warrants repl acement. DCA Clotor Pool ' s fl eet manager
uses 10 cents per mile as c r i t e r i a , and then reviews the vehicle's age,
mileage and repair history to determine whether i t should be replaced.
DOC, however, has not established policies specifying that a vehicle be
repl aced when i t reaches a certain age, mileage or when i t i s too costly
to operate.
In contrast to DOC, other corrections agencies, DPS and ADOT have
establ ished c r i t e r i a regarding vehicl e repl acement.
e 111 in0is Depariment of Corrections replaces cars and vans ihen
they have been driven 50,000 miles. Trucks are replaced a t
75,000 mi 1 es.
e Federal Prison System replaces vehicles every five years or
150,000 miles.
DPS repl aces vehicles a f t e r 70,000 mi 1 es.
o ADOT replaces cars after 90,000 miles or five years, AGOT's
pickups are replaced a t l(' r0,000 miles arid any vehicle with a loaa
capacity of more than one ton i s replaced a f t e r 125,000 miles.
Central Office needs to es tab1 i sh Depart~ ental vetlicl e repl acei;~ ent
policies to ensure that only cost e f f i c i e n t vehicles are in i t s f l e e t .
Although the total cost to upgrade the Department's vehicles cannot be
determined until DOC ' S vehicle needs are dccumented, the Department coul d
save approximately $ 443,370 in annual operating costs with an upgraded,
efficient fleet.
Some of D O C ' s vehicle f l e e t i s i n poor condition. The poor condition of
DOC's vehicles results i n high vehicle operating costs. DOC vehicles are
i n poor condition partly because the Department tras inadequate ri~ aintenance
programs and vehicle repair f a c i l i t i e s . The lack of maintenance is
particularly c r i t i c a l because many vehicl es are 01 d and beyond their
useful 1 ives when acquired by DOC.
RECOMMENDAT1 ONS
1 . DOC should establ ish a standardized Departmental program to include:
a. pol icies requiring preventive maintenance consistent w i t h
standards used by other agencies w i t h large vehicle f l e e t s , and
b. pol icies specifying that institutions compile information
necessary to evaluate f l e e t performance in terns of vehicle cost
per mile. Consideration should be given to acquiring an automated
system similar to the microcomputer system used by the Federal
Prison System to a s s i s t the i n s t i t u t i o n s nitti this task.
2. DOC should review and upgrade i t s vehicle maintenance f a c i l i t i e s by:
a. obtaining sufficient and proper vehicle repair equipment,
b. installing bus pits f o r i n s t i t u t i o n s w i t h buses, and
c. paving garage areas and mechanic bays.
3. Once DOC has establ ished a preventive maintenance program and ii8proveu
its f a c i l i t i e s , the Department should upgrade i t s f l e e t by:
a. establishing vehicle rep1 acement pol icies, and
b. purchasing newer vehicles. Funding for new vehicles could corne,
i n part, from savings in vehicle repair budgets.
FINDING I 1
THE DEPARTMENT COULD SAVE BETWEEX $ 192,000 AND $ 328,000 A YEAR BY
CONTRACTING FOR MORE OF ITS MAINTENANCE SUPPLIES
By contracting for more of i t s maintenance supplies, the Department o f
Corrections ( DOC could save between $ 1 92,000 and $ 328,000 annually.
P o t e n t i a l savings are l o s t because DOC contracts f o r only a small
percentage of i t s maintenance suppl ies. DOC could reduce unnecessary
costs by placing greater emphasis on contracting.
DOC'S Purchasing Section oversees a l l Departmental leasing, bidding and
contracting f o r equipment and operating supplies. Although the Section i s
responsible f o r ensuring t h a t purchases are made i n accordance with the
S t a t e ' s Procurement Code, i n d i v i d u a l i n s t i t u t i o n s nave some autonomy.
Only seven o f the 12 i n s t i t u t i o n s have buyers r e p o r t i n g d i r e c t l y t o the
Purchasing Section manager. Purchases f o r $ 2,500 o r less can be made by
these i n s t i t u t i o n s w i t h o u t t h e Purchasing Section's approval. Purchasing
agents a t i n s t i t u t i o n s w i t i l o u t buyers r e p o r t t o the f a c i l i t i e s ' business
managers. These ins ti t u t i o n s are 1 i m i ted t o purchases under $ 1,000.
DOC purchases major commodities such as food and o f f i c e supplies tnrough
State contracts establ ished by the Department o f Administration. For
example, according t o DOC, the Department expenced approximately $ 76
m i l l i o n for food i n f i s c a l year 1984- 85, most o f which was on State
contract. DOA does n o t have statewide contracts f c r niost maintenance
suppl ies. Consequently, we reviewed maintenance suppl i e s because it was
determined t h a t t h i s area could accrue the greatest savings through
contracts establ ished by DOC.
Inadequate Contracting
Results I n Higher Costs
For Biaintenance SUPPi~ e s
The Department may be l o s i n g between $ 192,000 and $ 328,000 yearly i n
p o t e n t i a l savings because it contracts f o r only t h i r t y percent of i t s
r o u t i n e maintenance supplies.
Seventy percent o f maintenance supplies not on c o n t r a c t - Only about
one- third of the ~ epartment's purchases f o r maintenance supplies are on
contract. A1 though obtaining term contracts f o r maintenance suppl i e s i s
cost e f f e c t i v e and feasible, DOC does not take f u l l advantage o f c o n t r a c t
opportunities.
Obtaining term contracts f o r maintenance suppl i e s i s important because
contracting i s cost e f f e c t i v e . A term c o n t r a c t i s establ ished through
competitive bidding, and can be broken down i n t o two main categories.
4 Firm f i x e d c o n t r a c t s i n c l u d e d e t a i l e d s p e c i f i c a t i o n s f o r a
d e f i n i t e q u a n t i t y o f goods over a d e f i n i t e period o f time.
Because these contracts speci fy a d e f i n i t e q u a n t i t y , vendors wi 11
give t h e i r best p r i c e quotes. However, s p e c i f i c needs must be
known i n order t o e s t a b l i s h f i r m f i x e d contracts.
0 Requirements contracts i n c l ude speci f i c or general speci f i c a t i o n s
f o r an i n d e f i n i t e q u a n t i t y o f goods over a d e f i n i t e period o f
time. The more d e t a i l e d the s p e c i f i c a t i o n s are, t h e g r e a t e r the
l i k e l i h o o d o f g e t t i n g vendors t o s a t i s f y a u s e r ' s needs. For
exampl e, a general requirements c o n t r a c t f o r automotive suppl i e s
krould i n c l ude a s p e c i f i c a t i o n t o f u r n i s h miscell aneous automotive
supplies f o r cars and trucks. A s p e c i f i c requirements contract
would include the types o f parts needed, such as hoses, b e l t s ,
fi 1 ters, carburetors, a1 ternators, e t c .
Since a1 1 term contracts invol ve q u a n t i t y purchases, they usual ly resul t
i n substantial savings. Purchasing a u t h o r i t i e s w i t h i n and outside the
Department estimate t h a t between 15 and 25 percent can be saved on term
c o n t r a c t purchases.* I n addition, i n a l i m i t e d survey, vendors on
contract with DOC f o r various maintenance suppl i e s quoted noncontract
prices t h a t i n d i c a t e DOC'S contracts r e s u l t i n savings between 15 and 30
percent.
The m a j o r i t y o f DOC ' s ins ti t u t i o n a l maintenance suppl ies are not purchased
on any State or DOC i n i t i a t e d term contract. Maintenance supplies
include e l e c t r i c a l , plumbing, paint, 1u ~ b e ra nd automotive suppl ies. Only
* Purchasing a u t h o r i t i e s include State Purchasing O f f i c e o f f i c i a l s , a
purchasing expert from a State U n i v e r s i t y , a n a t i o n a l l y recognized
procurement special i s t , and four DOC purchasing o f f i c i a l s.
23 percent, approximately $ 439,000 out o f $ 1.9 m i l l i o n , o f a l l maintenance
supply purchases were on contract during f i s c a l year 1983- 84, as shown i n
F i gure 1. * During f i s c a l year 1984- 85, only 29 percent, approximately
$ 615,000 out o f $ 2.1 m i l l i o n , o f DOC'S maintenance supplies purchases were
on contract.
FIGURE 1
CONTRACT AND NONCONTRACT PURCHASES
FISCAL YEARS 1583- 84 AND 1984- 85
MAR 1083- 84 FISCAL YEAR 1984- 85
CONTRACT NON- CONTRACT
Source: Compil ed by Auditor General S t a f f using maintenance expenditure
data from Arizona Financial Information System and contract
information provided by DOC purchasing agents
DOC has a low percentage o f contracted purchases because few i n s t i t u t i o n s
use term contracts. A1 though purchasing agents from a1 1 i n s t i t u t i o n s
agree t h a t increased term contracting would be b e n e f i c i a l , only two
* Expenditure figures are based on a review o f the nine major DOC
i n s t i t u t i o n s . These expenditures comprise the m a j o r i t y o f maintenance
expenditures.
21
i n s t i t u t i o n s purchase a s i g n i f i c a n t amount o f t h e i r maintenance suppl i e s
through requirements contracts. *
0 Both Arizona S t a t e Prison Coniplex ( AsPC)- Perryville and Arizona
State Prison ( ASP)- Fort Grant have requirements contracts f o r
1 umber, pl umbing, e l e c t r i c a l and automotive suppl ies.
ASPC- Perryvil 1 e has approximately 57 percent o f i t s maintenance
suppl i e s on term contracts .
0 ASPC- Tucson, ASPC- Doug1 as, ASP- Safford, Catal ina Mountain
Juvenile I n s t i t u t i o n and Adobe Mountain Juvenile I n s t i t u t i o n do
not have requirements contracts f o r 1 umber, pl umbing, e l e c t r i c a l
or automotive supplies.
0 ASPC- Fl orence and ASPC- Phoenix have requi rements contracts f o r
automotive suppl ies; however, neither have requirements contracts
f o r 1 umber, pl umbing o r e l e c t r i c a l suppl ies.
During our review, many cases were noted i n which supply purchases could
have been made on a term contract.
0 Seven i n s t i t u t i o n s purchased approximately $ 60,000 o f supplies
from the same major plumbing vendor during f i s c a l year 1984- 85,
w i t h o u t the b e n e f i t o f a term contract.
0 Seven i n s t i t u t i o n s purchased more than $ 50,000 o f miscell aneous
b u i l d i n g supplies from one o f the S t a t e ' s major suppliers during
f i s c a l year 1984- 85, without the b e n e f i t o f a term contract.
0 Seven i n s t i t u t i o n s purchased approximately $ 20,000 o f
r e f r i g e r a t i o n supplies from a major Arizona vendor during f i s c a l
year 1984- 85, w i t h o u t the b e n e f i t o f a term contract.
Savings l o s t due t o inadequate contracting - DOC loses p o t e n t i a l savings
because of i n s u f f i c i e n t term contracting f o r maintenance suppl ies. The
Council o f State Governments conducted a study of purchasing practices and
found t h a t seven States, i n c l u d i n g Cal i fornia, Idaho, Okl ahoma, Nebraska
and biontana, place 90 percent or more of al 1 t n e i r purcnases on t e r n
contracts. According t o a consul t a n t involved i n t h i s study, e f f e c t i v e
purchasing agencies attempt to establ ish term contracts f o r iiiost
* DOC ' s Purchasi ng Section has secured an agency- wi de requi relnents
contract f o r p a i n t supplies.
purchases. Other purchasing authorities, i n c l uding the State ' s Purchasing
Officer, estimate t h a t DOC could establish term contracts for
approximately 90 percent of i t s maintenance suppl ies.
Consequently, DOC could save between $ 1 92,000 and $ 328,000 annual ly by
contracting f o r most of i t s maintenance supply purchases. After deducting
those purchases t h a t are already on contract or are not amenable t o term
contracting, we calculated the e f f e c t s o f a 15 and 25 percent savings on
the remaining purchases. For f i s c a l year 1983- 84, savings would have
ranged from $ 192,000 to $ 319,000, as shown i n Table 5. Similarly, DOC
could have saved between $ 197,000 and $ 328,000 during f i s c a l year 1984- 85.
TABLE 5
POTENTIAL SAVINGS biITH ADEQUATE CONTRACTING
FISCAL YEARS 1 983- 84 AND 1 984- 85
Total maintenance
supply purchases
Less purchases:
Currently on contract
Fiscal Year Fiscal Year
1 983 - 84 1 984 - 8 5
Not amenabl
con t r a c t s 71 yo 191 ,000 21 4,000
Potential contract
purchases $ 1,277,000 $ 1,312,000
Savings a t 15 percent $ 191,550 $ 196,800
Savings a t 25 percent $ 319,250 $ 328,000
) Purchases not amenable to tern contracting i n c l uae one- tine
purchases, special order items, such as repair parts from an
equipment's o r i g i n a l manufacturer, and emergency r e p a i r suppl ies.
Source: Compiled by % Auditor General s t a f f with DOC maintenance expenditure
data from the Arizona Financial Information Sys tern dnd vendor
information provided by DOC purchasing agents
In addition to the potential savings, increased use of term contracts
could save time. For example, each time an i n s t i t u t i o n purchases supplies
costing between $ 500 and $ 1,000, three telephone quotes must be obtained
from potential suppl iers. Likewise, three written quotes must be obtained
for purchases between $ 1,000 and $ 2,500. If more maintenance supplies
were on term contracts, DOC Purchasing personnel estimate that this time
consuming activity would be significantly more efficient. One
i n s t i t u t i o n ' s buyer stated that daily work load could be reduced by as
much as 15 percent w i t h more term contracts.
DOC a1 so coul d save additional monies by consol i dati ng physical pl ant
improvement project purchases. DOC has received a total of $ 3.4 million
since fiscal year 1983- 84 for physical pl ant improvements.* These
projects are overseen by the Department's Facil i t i e s Maintenance, Pl anniny
and Food Service Bureau. A1 though purchases for some physical plant
improvement projects coul d be consol idated, currently they are not. For
example, when building supplies are needed for two separate projects a t
the same f a c i l i t y , the supplies are purctiased through two firm fixed
contracts rather than consolidated into one. Because savings are greater
when large quantities of supplies are procured in a single purchase, ljCC
could obtain additional savings i f purchases for these projects were
coordinated when possible.
DOC Heeds To Place Greater
Emphasis On Contracting
DOC'S 1 imi ted use of term contracts for purchasing n~ aintenance suppl ies
results from a lack of emphasis on their use. The Department's Purchasirlg
Section does not compile information necessary to establ - isti the nost
beneficial term contracts. Although a new purchasing information system
being developed by the Department of Administration ( DOA) will ul tinately
improve purchasing effectiveness, DOC should take some actions now.
* Physical plant inlprovenent projects 3re funded witti Land, Building,
and Improvement ( L B & I ) funds. These projects consist of major
maintenance items and are overseen by DOC. All other DOC LMI
projects are overseen by the Department of Administration.
Important information i s n o t compiled - DOC'S Purcliasing Section does not
d i r e c t i n s t i t u t i o n s t o compile information necessary t o establish e i t h e r
s p e c i f i c requirements contracts or f i r m f i x e d contracts which are more
beneficial than general requirements contracts. The Purchasing Section i s
the Departmental u n i t i n charge o f contracting f o r maintenance suppl ies.
The Section, therefore, i s responsible f o r seeking c o n t r a c t
opportunities. The Section, however, does not c u r r e n t l y survey
i n s t i t u t i o n s to determine what maintenance suppl i e s each i n s t i t u t i o n
uses. Estimated annual needs f o r s p e c i f i c supplies l i k e lumber could be
obtained through surveys of the i n s t i t u t i o n s ' purchasing agents. Such
surveys would a1 1 ow the Purchasing Section t o coordinate commodity
requirements and establ i s h speci f i c requirements contracts o r f i r m f i x e d
contracts f o r the i n s t i t u t i o n s ' maintenance needs. The more s p e c i f i c the
Department can be i n specifying i t s maintenance supply requirements, the
more b e n e f i c i a l t h e term c o n t r a c t w i l l be. Without t h i s information, the
Purchasing Section 1 acks data t o evaluate purchasing patterns and
establ i sh s p e c i f i c requirements contracts o r f i r m f i x e d contracts.
DOA's Purchasing O f f i c e periodical ly surveys agencies to determine
q u a r t e r l y and annual needs f o r various suppl ies. These surveys require
agencies t o estimate annual needs f o r items 1 i k e food, vehicles and
medical suppl ies. The State Purchasing O f f i c e compiles t h i s information
and consol i dates agency purchases on s p e c i f i c requirements contracts and
f i rm f i x e d contracts.
Because the State purchasing o f f i c e a1 ready conciucts surveys i n other
areas, DOC be1 ieves t h a t DOA should c o n t r a c t f o r maintenance slrppl i e s as
well .* According t o a DOC spokesperson " If [ t h e State purchasing o f f i c e ]
awarded statewide maintenance supply contracts, a l l agencies could
benefit." The State purchasing o f f i c e r , however, disagrees t h a t it i s h i s
o f f i c e ' s r e s p o n s i b i l i t y . He stated t h a t because purchasing i n Arizona i s
more decentralized than i n some other states, Arizona State agencies i~ iust
play a more a c t i v e r o l e i n securing term contracts. DOC has Central
* Currently, approxiniately 30 t o 46 percefit o f a l l agency purctiases are
on State contract. State contracted maintenance suppl i e s i n c l ude only
a few i terns l i k e 1 i g h t bulbs, car b a t t e r i e s and t i r e s .
Office and i n s t i t u t i o n a l s t a f f t o meet t h i s r e s p o n s i b i l i t y and could have
reduced costs by using i t s purchasing personnel t o determine maintenance
needs t o c o n t r a c t f o r maintenance supplies.
DOC should use automated system c u r r e n t l y being developed - The Department
should increase the use o f term contracts f o r maintenance supplies t o
avoid unnecessary costs. A new purchasing information system, c u r r e n t l y
being developed by DOA, w i l l a l l ow DOC t o s u b s t a n t i a l l y improve purchasing
effectiveness. I n t h e i n t e r i m , DOC should r e q u i r e a1 1 i n s t i t u t i o n s to
establ i s h general requirements contracts.
An automated procurement system, c u r r e n t l y being devel oped by DOA ' s State
Purchasing Office, can improve DOC'S contracting effectiveness. The
system i s c a l l e d Purchasing Autolliation Network and Contracting
Effectiveness i n Arizona ( PANACEA). According to a DOA o f f i c i a l , a
primary reason f o r developing t h i s system i s so the S t a t e ' s Purchasing
O f f i c e can increase the amount purchased on State contract. Another
objective of the system, however, i s t o allow asencies to obtain more
speci f i c requi remen t s and f i r m f i x e d contracts themselves.
PANACEA w i l l a1 low DOC t o compile the data necessary to consol idate and
coordinate maintenance supply purchases. It w i l l a1 1 ow DOC to monitor
maintenance sbpply purchases i n a v a r i e t y o f ways. For example, t j i t h
PANACEA DOC can determine: 1 ) what s p e c i f i c supplies are being purchased,
2) h o m~ u~ ck each item costs, 3) the frequency o f purchases, 4) the voluriie
purchased, and 5) the vendors used f o r each purchase. With t h i s
information, DOC could maximize i t s use o f speci f i c requi r e m e ~ t s contracts
and fir m fixed contracts t o accrue substantial savings annual ly.
DOC should use PAldACEA when it comes on- 1 ine. DOA plans t o begin t e s t i n g
PANACEA i n September 1986 and would 1 i k e t o include DOC as a t e s t agency.
DOC off i c i a1 s, however, are unsure whether the computer hardware usea f o r
the Adult Information Management System i s capable o f handling the
processing requirements f o r PANACEA. DOC, i n conjunction with DOA, needs
t o analyze i t s needs and request funding for f i s c a l year 1987- 88 so it can
f u l l y u t i l i z e PANACEA.
In the interim, DOC should establ ish general requirements contracts for
a1 1 institutions. These contracts resul t in signi ficant savings and are
not d i f f i c u l t to obtain. A sophisticated data base is not necessary to
i n i t i a t e general requirements contracts. Only general specifications are
necessary to establish these contracts. For example, ASP- Fort Grant has a
general term contract for automotive suppl ies. The speci fications for
t h i s contract are very basic.
Vendors will be required to furnish miscellaneous
replacement supplies and parts for the following type
of equipment; [ sic] automobiles, trucks, buses,
stationary industrial engines, farm tractors and
implements, etc.
As a result, ASP- Ft. Grant was able to save between 25 and 50 percent off
the l i s t price for purchases from this vendor. Moreover, general
specifications similar to these can be written for various types of
maintenance suppl ies, such as plumbing, electrical and 1 umber suppl ies.
However, general requirements con tracts shoul d not be used indefini tely.
Even i f a1 1 institutions had general requirements contracts, DOC would
s t i l l be limited in the amount of supplies i t could purchase on
contracts. Without incorporating PANACEA or using surveys, the Departrilen t
cannot determine its specific maintenance supply requirements. \ u i t h a
more comprehensive data base DOC could obtain contracts for up to 90
percent of i t s maintenance supply purchases.
CONCLUSION
Increased contracting for maintenance supply i tens coul d save DOC between
$ 1 92,000 and $ 328,000 annual ly. Potential savings are 1 ost because CfOC
contracts for only a small percentage of its r~ laintenance supply needs.
RECOMMENDATIONS
1. The Department should consolidate i t s maintenance supply requirements
through increased term contracting. The Department can do t h i s by
u t i 1 izing DOA's new automated procurement system, once it coGes
on- 1 ine, to establ ish specific requirements contracts and firm fixed
contracts. In order to fully u t i l i z e PANACEA, DOC, i n conjunction
w i t h DOA, needs to analyze i t s computer hardware and operating budget
requirements, and request funding for f i scal year 1 987- 88.
2. In the interim, DOC should d i r e c t i n s t i t u t i o n s t o compile general
speci fications and establ ish general requirements contracts for a1 l
institution maintenance supplies.
3. DOC'S Facil i t i e s Maintenance, Planning and Food Service Bureau and
Purchasing Section should coordinate and consol i date construction
supply purchases for physical pl ant improvement projects, whenever
possible, to save additional monies.
FINDING I11
THE DEPARTMENT OF CORRECTIONS NEEDS TO IIviPFlOVE PLAIdNING FOR AND
DEVELOPMENT OF ITS ELECTRONIC DATA PROCESSING SYSTEFYIS
The Arizona Department of Corrections ( DOC) needs to improve planning for
and development of its electronic data processing ( E D P ) systems. Proper
planning for and control over EDP systems is c r i t i c a l to achieve optimum
resul ts. DOC, however, has inadequately pl anned its EDP systems.
Furthermore, DOC's current EDP devel opmen t, aside from the Adul t
Information Management Sys tem, is of 1 imi ted Department- wi de
applicability.
DOC's tremendous growth since i t was established 18 years ago has created
the need for increased management information and control. The Depart~ ent
has grown from three i n s t i t u t i o n s to 15, with five additional f a c i l i t i e s
under construction, and now has operations throughout the State. In the
past several years, DOC has experienced increasing ai fficul tly in exerting
sufficient control over operations and performing functions efficiently
and effectively. DOC has recognized that many of its manual systems no
longer function adequately under the increased demands the Department
faces. As a resul t, DOC is attempting to address the need for systems to
better control and manage essential operational data. The Department has
developed two major EDP systems since 1983. Both of these projects were
on- 1 ine adul t information systems. In addition, the 1986 Legisl ature
appropriated $ 693,600 for the Department to develop an automated
accounting system.
EDP Planning And
Control Are Cri tical
Proper planning and control are c r i t i c a l to develop automated systems w i t h
optimum results. Top level management must determine an organization's
EDP needs and develop plans to meet those needs. Once plans have been
established, management must ensure t h a t a l o g i c a l series o f steps f o r
system development are f o l l owed.*
Management involvement i s essential i n developing EDP systems t h a t w i l l
meet an organization's needs. Top 1 evel management has a responsibil i ty
t o determine i t s goals and es tab1 i s h the information system's objectives
t h a t w i l l best serve these goal s. Management needs t o be concerned with
1 ong- term pl ans f o r the organization Is EDP e f f o r t s . Such pl anni ng
provides objectives and management control f o r meeting an organization's
needs, and i s especially important i n EDP because o f the lead time
necessary to design, develop and implement automated systems. One way t o
ensure management involvement i s through an EDP steering committee or
senior management committee. Furthermore, by c l e a r l y s t a t i n g i t s goal s
and objectives, top- 1 evel management i s b e t t e r able t o p r i o r i t i z e i t s
needs t o ensure t h a t the t o t a l organization b e n e f i t s from EDP systems.
Once EDP plans set f o r t h an o r g a n i z a t i o n ' s automation needs and
p r i o r i t i e s , management standards must be developed to provide the
framework upon which a l l EDP e f f o r t s should be based. Standards f o r EDP
system devel opment general ly consist o f a speci f i c sequence of steps.
P r i o r study and analysis of the proposed systems i s a very important p a r t
o f the system development process. Lack o f proper planning increases the
d i f f i c u l t i e s faced i n accomplishing EDP objectives. As a r e s u l t , t i n e and
e f f o r t may be wasted and excessive costs may be incurred before the
desired r e s u l t s are achieved.
The f i r s t step i n EDP system development i n v ~ l v e s gathering basic
information about the problem, and reviewing a1 t e r n a t i v e sol utions and
t h e i r costs. An i n i t i a l study and a f e a s i b i l i t y stuay are generally
prepared. These are summarized as f o l l ows.
* Information pertaining t o EDP plans 2nd standards has been compiled
from l i t e r a t u r e by the American Management Association, the EDP
Auditors Foundation, EDP management consul tants, and from interviews
with ED? special i s t s .
An i n i t i a l study involves a rough estimate of the project's scope
and provides a basis for determining whether further study i s
warranted.
A f e a s i b i l i t y study provides a sound and detailed basis upon
which management can decide whether a project should be
authorized or not. A f e a s i b i l i t y study generally includes:
- analysi s of general sys tem requi remen ts;
- alternative solutions to system problems, analyzed from a
cos t- benefi t perspective;
- recommendations and justification for system selection;
- impact analysis of recommended system; and
- a project plan.
This information shoul d give management a clear statement of the
organizational consequences, plans, costs and benefits of different
systems upon which to base a decision for choosing systems a1 ternatives.
The remainder of the EDP system development process generally includes the
foll owing three elements.
0 Detail Design - The system requirements are more clearly defined
and a step- by- step description of how the system i s to operate i s
prepared. This information i s gathered by user representatives,
technical personnel and special i s t s , and reviewed by management
to ensure that the system will meet the needs identified during
the study stage.
@ Program Development - The detail design information i s translated
into computer programs from which the system will run.
@ Implementation and Operation - System testing i s completed,
training i s done, and conversion to the new system takes place.
Once completed, the system becomes functional and i s maintained.
By adopting standards to ensure that systems are developed w i t h i n this
framework, an organization i s best able to develop optirrium systems to meet
i t s EDP needs.
DOC Has Not Adequately
Planned I t s EDP Systems
A1 though EDP s p e c i a l i s t s have established EDP planning procedures, DOC has
not followed these guidelines or adequately planned i t s EDP systems. The
Department's f i r s t on- 1 ine inmate information system, DM- IVY l acked
s u f f i c i e n t planning and was o f l i m i t e d usefulness to DOC. Lack of
planning for DOC's Adul t Information blanacjement System ( AIldS) resul ted i n
unanticipated costs and concerns about inaccurate data. In addition,
DOC's budget request f o r funds t o develop an automated accounting system
during f i s c a l year 1986- 87 was made without adequate plans.
DCI- IV plan not adequate - DOC's f i r s t on- line offender information system,
DM- IVY was poorly planned and consequently could not meet the Department's
needs. The system no longer exists, despite the f a c t t h a t DOC expended
$ 80,000 and ten months o f e f f o r t on DM- IV. DOC did not complete a
feasi b i l i t y study or perform a comprehensive needs analysis p r i o r t o
i n i t i a t i n g DM- IV's devel opment. A1 though DOC o r i g i n a l l y pl anned f o r
DM- IV to produce l i s t s o f inniates e l i g i b l e f o r parole, several other
Departmental needs were not considered. Three months a f t e r the p r o j e c t
was underway, DOC met with the Department o f Administration ( DGA) Data
Center to discuss expanding DM- IV beyond i t s o r i g i n a l design to address
some o f these other r e l a t e d needs.* After reviewing ijOC's needs, DOA
cautioned t h a t continuing with DM- IV as o r i g i n a l ly designed coul d compound
DOC's problems, because the system would not meet al 1 needs ana i ~ o u l d ada
to DOC'S many unintegrated systems. I n addition, the system would not be
able to ". . . a l l e v i a t e l a b o r i n t e n s i v e e. fforts as required iby these
other systems]." Instead, DOA said, ". . . the new system will i n a l l
l i k e l i h o o d add to your di1er; imd rather than a s s i s t you i n resalving
problems to which you are presently confronted."
Because of the change i n p r o j e c t scope, DGA recommended t h a t GOC stop the
DM- IV project and do additional analysis to ensure t h a t a l l areas of
concern \/ ere covered. However, DOC decided to continue with the ELI- IV
* DOC contracted with the DOA Data Center i n January 1983 f o r the design
and programming o f DFI- IV.
project, despite DOA's warning that continuing w i t h the project as
designed would require future redesign, would end up costing the
Department more, would add to DOC's work load, and could not satisfy a l l
DOC's needs. DOC made this decision because i t f e l t that i t lacked the
time and funds to redesign the system.
Seven months l a t e r , however, DOC decided to phase out DM- IV because the
system coul d not meet DOC ' s comprehensive offender information needs.
After a change in DOC administration, the new DOC Director questioned the
1 imited usefulness of DM- IV. As a result, DOC began developing a
comprehensive adul t offender information system. The Department decided
that DM- IV's data base would be transferred to this system when it was
developed. When i t was final ly phased out, DOC had expended approximately
$ 80,000 for DOA's work on DM- IV over a ten- month period. In addition, two
DOC programmers and a t l e a s t two DOC inmate records s t a f f were involved i n
this project on a f u l l o r part- time basis during that period.
Insufficient plans contribute to AIMS problems - DOC's current offender
information system, AIMS, was also insufficiently planned for, and
resulted i n unanticipated costs and s t a f f needs. A1 though DOC spent six
weeks analyzing i ts information requirements, the Department's pl an for
AIMS was i n i t i a l l y unrealistic. DOC d i d not complete a f e a s i b i l i t y study,
which led to a $ 537,535 increase i n the Department's AIlllS expenditures
over i t s i n i t i a l budget request. Despite time and resources devotea to
AIMS development i n fiscal year 1984- 85, there are some concerns about
AIMS providing accurate, re1 iabl e data.
AIMS, as i n i t i a l l y envisioned, was unrealistic i n scope. After a six- week
study, the AIMS task force outl ined 28 specifications that were to be net
by AIMS.* A former DOC Director, i n a l e t t e r to the Chairman of the
Senate Subcommi ttee on Appropriations, stated that AIlJiS woul d comprise
these 28 functions. Additional ly, the Director outl ined several other
systems that were to operate along w i t h AIiqiS on one large data base.
* Soon a f t e r the 1583 First Special Legislative Session on Corrections a
task force of ten DOC employees analyzed and developed DOC's
information system requirements. The task f o r c e ' s e f f o r t became the
basis for the Department's present Adul t Information Management System.
However, many o f the 28 functions, such as budgeting and f i s c a l
operations, s t a f f assignment, vehicles and transportation, capital
equipment, and personnel, are unrelated t o DOC ' s a d u l t inmate population.
A data base oriented to inmate records could not be expected t o support
such operations. Of the o r i g i n a l 28 AIMS specifications, only seven are
f u l ly operational, f i v e functions are c u r r e n t l y being devel oped, whil e
sixteen functions w i l l not be p a r t o f AIMS.
Because the Department did not complete a comprehensive f e a s i b i l i t y study
before requesting funds f o r AIMS, DOC did not i d e n t i f y a l l costs
associated with the project and AIMS expenditures exceeded the i n i t i a l
budget request by a t l e a s t $ 537,535, or 50 percent. DOC's i n i t i a l AIMS
request included three f u l l - time equivalent ( FTE) positions and $ 1,069,200
f o r f i s c a l year 1984- 85 to develop and implement an adult information
management system, although the specific system t o be implemented had not
been determined a t the time o f the request. Once the system
specifications were determined, the request was increased t o nine FTEs and
$ 1,335,500.* Moreover, data input costs were not included i n the i n i t i a l
AIMS budget request. Approximately $ 40,000, was expended i n overtime
payments from the i n s t i t u t i o n s ' budgets f o r AIivlS data entry, as shown i n
Table 6. In addition, approximately 6281,351 o f UOC's lump sun1
appropriation was expended on AIlilS i n f i s c a l year 1984- 35. Because DOC
used i t s management information system ( MIS) l i n e item funds along with
other operational and i n s t i t u t i o n a l funds to support AICIS aevel opment and
imp1 ementation, establ ishing the t o t a l f i s c a l year 1984- 85 expenditures
for AIt4S i s d i f f i c u l t . However, based on costs t h a t have been i d e n t i f i e d ,
DOC's f i s c a l year 1984- 85 AIblS re1 ated expenditures exceeded the o r i g i n a l
budget request by $ 537,535, or 50 percent.
* The i n i t i a l request was revised during the appropriations process.
The new request was the r e s u l t o f research done by J o i n t L e g i s l a t i v e
Budget Committee s t a f f and DOC s t a f f . The revised request provides
further evidence o f poor planning - only two o f the additional FTEs
were programmer/ anal ys t posi ti ons needed for sys tem development. The
Department had to go through the time consuming process of
r e c l a s s i f y i n g f i v e computer operations positions i n t o
programmer/ analyst positions.
TABLE 6
AIMS APPROXIMATE EXPENDITURES
FISCAL YEAR 1984- 85
Initial Budget Request
Less Approximate Expenditures:
MIS Line ~ t e m ( l )
Other AIMS costs from
1 urnp sum appropriation ( 2 )
Data i n p u t costs from
institutional budgets
Unfavorabl e Variance
Percentage Of Unfavorable Variance 50%
The MIS line item was established so t h a t a l l AIMS costs could be
closely monitored. The Legislature appropriated $ 1,335,500 for the
MIS 1 ine item. The amount presented is the actual expenditure from
that 1 ine item.
These expenditures came from DOC'S budget for the MIS bureau.
During the AIMS budget process, the Department told JLBC s t a f f t h a t
the MIS employees a1 ready a t DOC could not be used for AIbiS.
However, all but one s t a f f person were involved i n the project on a
full- time basis.
Source: Compiled by Auditor General staff from AIMS expenditure data
obtained from DOC personnel and fiscal year 1984- 85 year- end AFIS
data for the MIS 1 ine i tem
DOC'S failure to complete a f e a s i b i l i t y study a1 so resulted i n the
Department. overlooking how AIMS would affect other Departmental operations
once i t was implemented. A1 though a member of the EDP Advisory Corilmittee
requested that DOC analyze the ramifications of AIMS on DOC s t a f f , an
organizational impact study was never done. * Consequently, a1 though the
Department assigned institutional personnel to coordinate AIMS a t the
institutions, DOC did not identify the need for additional iristi tutional
personnel to maintain the AIMS system.
* The EDP Advisory Committee, which met only once, was established by a
former DOC Director to review the progress and development of AIMS.
35
Currently, according t o DOC personnel and the f i s c a l year 1986- 87 budget
request, the Department i s p u l l ing s t a f f from r e g u l a r l y assigned duties t o
maintain AIMS.* In addition, because DOC did n o t a n t i c i p a t e t h e need f o r
a method t o ensure the accuracy o f AIMS data, the Department presently
does n o t have the organizational c a p a b i l i t y t o do so.
To compl ete systems devel opment w i t h i n one year, before appropriations
reverted and funds were no longer available, the Department compromised on
the accuracy o f AIMS data. DOC had t o f i r s t determine what system it was
t o implement and then get it operational before the end o f f i s c a l year
1985. I n order t o meet the year- end dead1 ine, the Department re1 i e d on
data from other automated offender information systems - even though some
o f the data was known t o be inaccurate. Lack o f adequate time and s t a f f
also hampered DOC's a b i l i t y t o update data from other systems and check
the accuracy o f new data being entered i n t o AIMS.
A method to ensure accurate data i s p a r t i c u l a r l y important i n t h i s case,
since some o f the o r i g i n a l data was known t o be inaccurate. Because of
concerns regarding inaccurate data, some users are r e l y i n g more t ~ e a v i l y on
w r i t t e n documents than on AIMS. For example, although AIBlS i s designed t o
provide d a i l y counts o f inmates by u n i t , some u n i t s are instead r e l y i n g on
manual counts. DOC has only recently begun t o address the need f o r a
means o f ensuring data accuracy wi t h i n A11biS. The Department recently
formed an AIMS Data Qua1 i ty Group t o address t h i s problem.
Accounting system request lacks adequate plan - DOC's f i s c a l year 1986- 87
budget request f o r an automated accounting system has been made without
d e f i n i t e plans, and could r e s u l t i n problems s i m i l a r t o those enccuntered
with AIMS. The Department's recent budget request f o r $ 751,300 was made
without the benefit o f a f e a s i b i l i t y study or a plan specifying what
system broul d be developed. The Department did perform prel iininary research
* The f i s c a l year 1986- 87 budget request for Adul t I n s t i t u t i o n s included
f i v e program p r o j e c t s p e c i a l i s t s to operate and maintain AIMS a t the
adul t i n s t i t u t i o n s . Juvenile and Communi ty Services a1 so asked for
s i x data entry operators t o coordinate data input. These positions,
however, were n o t funded.
for the system and prepared a report i d e n t i f y i n g a1 ternative approaches.
However, the budget request was not based on costs f o r any of the
a1 ternatives examined i n the report. Instead the request was based on
DOC's estimate o f what it would cost to contract with a vendor to develop
a system, and s t a f f needs to maintain the accounting syste~ n once developed.
DOC's accounting system report, which i s i n c l uded with the Department's
budget request, a1 so 1 acks substantive Department- wide invol vemer~ t and
thorough investigation. DOC did not assemble a task force to study
accounting system needs. Instead, two accounting fi rms and an i n d i v i d u a l
h i r e d by DOC conducted the research. Only b r i e f contacts were made with
DOC accounting system users. Further, a1 ternatives presented i n DOC's
accounting system study were not thoroughly evaluated before funds were
requested. For example, the Arizona Financial Information System ( AFIS)
was one of the a l t e r n a t i v e s reviewed. AFIS was ranked low among DOC's
alternatives, but DOC did not formally provide DOA Finance - General
Accounting O f f i c e w i t h a l i s t o f i t s accounting system needs or receive
formal comment from DOA, u n t i l a f t e r DOC had completed i t s preliminary
research and submitted i t s budget request.* Another a l t e r n a t i v e proposes
the use o f the Department's minicomputers to develop and/ or run an
accounting system. DOC, however, has not adequately analyzed i t s current
hardware c a p a b i l i t i e s t o determine whether the minicomputers used f o r the
AIMS network could hand1 e the additional system requirements. Response
time has been a continuing problem with AIMS, and use o f the minicomputers
f o r accounting coul d create a d d i t i o n a l problems i n t h i s area.
DOC o f f i c i a l s indicate t h a t the need f o r an automated accounting system i s
c r i t i c a l . However, I ack o f adequate pl anni ng f o r automated system
development can increase the d i f f i c u l t i e s involved i n accompl ishing the
project. Without adequate eval u a t i on and careful pl anning, DOC's attempt
* According t o DOA, most o f DOC'S accounting system needs can be net
when AFIS i s transferred from the Honeywell system t o the IBM computer
system. DOA w i l l receive funding i n f i s c a l year 1986- 87 to begin the
conversion process, which they estimate w i 11 be conipl eted by December
1989.
t o develop an accounting system could r e s u l t i n wasted time, excessive
costs and 1 imi ted usefulness t h a t characterized the Department's previous
e f f o r t s .
The 1986 L e g i s l a t u r e has recognized DOC's need f o r an accounting system by
appropriating $ 693,600 as p a r t o f the Department's lump sum
a ~ ~ r o p r i a t i o n . To ensure t h a t DOC has adequately studied i t s needs p r i o r
t o developing or a c q u i r i n g t h e system, the L e g i s l a t u r e has l i m i t e d the
Department's a u t h o r i t y t o spend t h i s appropriation. The Department may
spend only $ 193,600 of the appropriation without J o i n t L e g i s l a t i v e Budget
Commi t t e e ( JLBC ) approval. The remaining $ 5G0,000 i s f o r development or
a c q u i s i t i o n and implementation o f the accounting system and may not be
used u n t i l approved by JLBC.
DOC's Use O f EDP
Systems I s Limited
Despite the Department' s need f o r automated sys tens, DOC ' s c u r r e n t EGP
appl i c a t i o n s are 1 i m i ted. While many functions might b e n e f i t from
automation, AIMS remains the only on- 1 ine Department- wide EGP system. As
a resul t, some administrators w i t h i n DOC are developing microcomputer
appl i c a t i o n s w i t h 1 irni ted Department- wide b e n e f i t s . At present, CGC does
not have the c a p a b i l i t y t o expand i t s automated systems t o meet other
needs.
Many functions not automated - Although the Department has trle need f o r
greater automation, AIMS i s the most comprehensive Department- wi de
appl i c a t i o n t h a t DOC's Bureau o f Data Management ( Blji4) i s a c t i v e l y working
on. Present BDM s t a f f are p r i m a r i l y involved w i t h maintaining AIMS and
are not a v a i l a b l e t o develop new applications. Twelve o f the Cepartrzerit's
13 a v a i l a b l e p o s i t i o n s f o r appl i c a t i o n development are dedicated t o AIMS.
Most DOC functions are c u r r e n t l y operating w i t h o u t the benefits of an
automated system. Many areas are operating t o t a l l y manual systems wnich
r e q u i r e s u b s t a n t i a l s t a f f time t o maintain and organize, provide 1 irni ted
management information, and are vulnerable t o human error. For example, d
manual system t o track and maintain i n v e n t o r i e s i s used a t most
institutions. Institutional budgets, which range from $ 900,000 to
$ 36,000,000, are developed and monitored w i t h a manual ledger system. In
addition, DOC's payroll for more than 4,200 employees i s based on a manual
time reporting system.* Areas that might benefit from automated systems
i ncl ude :
budgeting
accounti ng
payroll
inventory control
s t a f f assignment/ training
1 i tigation tracking
heal t h services
fl eet and faci 1 i ties management
DOC has tried to offset its lack of Department- wide EDP systems through an
increased use of microcomputers. Mi crocomputers have assi s tea the
Department i n automating some functions, providing more accurate and
timely informati on. However, while microcomputers are an improvement over
manual systems, they can provide only 1 imi ted Department- wide information
and control. Microcomputer appl ications are developed on a case- by- case
basis and do not benefit the Department as a whole. For example, one
institutional business manager recently acquired a microcomputer to
perform budget and inventory control functions that are done manually a t
other institutions. DOC's Bureau of Manasernent anti Budget uses a
microcomputer to maintain position control data, while the i n s t i t u t i o n s
manually maintain simil ar data. Both of these microcomputer systems,
while providing temporary sol utions t o s p e c i f i c problems, do not provide
Department- wide information or control.
DOC needs the capability to develop systems - DOC currently lacks the
abi 1 i ty to devel op Departmen t- wi de EDP sys tems. The Department does not
have an EDP plan or standards to guide EDP system developri~ ent. DOC nay be
hampered i n its EDP efforts because of inadequate resources.
* Payroll data i s assembled manually a t the institutions, forwardea to
Central Office for processing and transmitted to DOA where the
information i s entered into DOA ' s computer sys tem.
DOC does not have a current EDP pl an. DOC devel oped an EDP pl an in 1981 ,
but it i s now obsolete and needs to be updated. In addition, the
implementation of AIMS has changed Departmental EDP needs. Although DOC
anticipates preparing a plan by the end of the year, as required by DOA,
neither BDM nor any other Departmental staff are assigned to do EDP
planning.
In addition to lacking an EDP plan, DOC also lacks EDP development
standards to ensure that EDP systems are thoroughly investigated before a
system is selected. DOC needs to establish EDP standards to ensure that a
mechanism for optimal system development i s i n place. For example, i t i s
important that all related needs be identified before an EBP system i s
developed. In addition, several solutions to EDP problems should be
considered and eval uated from a cos t- benefi t perspective, prior to
management sel ecting a sol ution and requesting funds. Otherwise, future
DOC systems may experience problems similar to those encountered i n DLI- IV
and AIMS.
While DCC has many EDP needs, the Departrzent lacks sufficient resources to
develop any new applications. In contrast to DOC, other State agencies
have more resources for EDP and many comprehensive EDP applications. The
Arizona Department of Transportation ( ADOT), the Department of Public
Safety ( DPS), and the Department of Economic Security ( GES) are sir;; ilar to
DOC i n that these agencies have large budgets and operations throughout
the State. However, DOC uses less than 1 percent of i t s bltdyet for EDP,
while these other agencies devote between 3.2 and 4.7 percent of their
budgets to EDP, as shown in Table 7. In addition, DGC has rnore ernpioyees
than these other agencies b u t has the fewest EDP positions. Because these
agencies have the resources, they have many EDP systems. For cxdirple, GPS
has automated consumable inventory, accounting, personnel information and
offender tracking systems, as well as EDP systems for other areas.
TABLE 7
CObPARISON OF EDP BUDGETS AND PERSONNEL
FISCAL YEAR 1 585- 86
EDP % o f Agency EDP % o f Agency
Agency FTEs FTEs Budget Budget
DOC 17 0.4% $ 1,313,070 0.8%
DP S 52 3.3% $ 3,361,908 4.7%
Includes State funded FTEs and monies only. Federal monies support
an additional 155.5 FTEs and provide an additional $ 10 m i l l i o n to
the DES Office of Data Administration.
Source: Compiled by Auditor General s t a f f from data obtained from DOC,
DPS, ADOT, DES and the 1985 Arizona Appropriations Report
These State agencies also have EDP planners and agency EDP plans. ADOT
has three EDP planners, DES has one p r i n c i p a l planner and three
assistants, and DPS has one person assigned t o planning. These agencies
a l l have comprehensive EDP plans. Corrections departments i n other
states, such as Florida and Washington, have EDP planning c a p a b i l i t i e s and
EDP plans.
CONCLUSION
DOC needs to improve i t s EDP system development. Althoucjh proper planning
i s c r i t i c a l f o r developing EDP appl ications, DCC has inadequately p l anneci
i t s EDP systems. In addition, 5OC's current EGP systeri~ development i s o f
1 i m i ted Departmen t - w i de appl i cabi 1 i ty.
RECOMPIENDATI OtdS
1 . The Department shoul d ensure top- 1 evel manageirient involvement i n
defining and p r i o r i t i z i n g EDP system goals and objectives. One
possible way t o ensure rnanagen~ etn involvement i s through an executive
1 evel EDP steering committee.
2. Once DOC establishes an EDP planning mechanism, the Department should
develop a Department- wide EDP plan that meets DOA requirements. The
plan should ref1 ect management's EDP priorities and include recent EDP
accompl ishments, Department goal s, planning assumptions, specific
automation objectives, and more detai 1 ed strategies for meeting these
objectives.
3. The Department should develop standards for system development. These
standards should ensure that the Department foll ows the patterned
sequence of steps in development of a1 1 EDP systems. The sequence of
steps incl udes: study and analysis, detail design, program
development, imp1 ementation, and operation.
4. The Department should evaluate i t s EDP staffing needs to determine
whether additional funding i s necessary. Special consideration shoul d
be given to the need for EDP planners, programmers, data entry
personnel , and institutional EGP coordinators. Once DOC has reviewed
i t s EDP staffing needs, the Department should seek funding for these
positions.
5. The Cepartn~ ent shoul G coniplete a comprehensive neeus analysis arid
feasibi 1 i ty study of i ts accounting needs before requesting J LBC
approval t o develop or acqui re the au tonla ted accounting system. DOC
should examine a1 ternative accounting system sol utions and their
costs. DOC should consider AFIS as one of i t s a1 ternatives and riork
with DOA Finance personnel to determine whether the system could meet
DCC ' s neeas. Top- 1 eve1 inanagenlent shoul d then choose an accoun t i ng
system to be developed and request the neeaed funds ttlrough the budget
process,
OTHER PERTINEtdT INFORtlATI ON
During the Central Management audit of the Department of Corrections
( DOC), we developed pertinent information regarding the Department's
organizational structure and management. In reviewing DOC'S
administrative a c t i v i t i e s , one problem that we kept coming across was the
Department's frequent organizational changes. In fact, some of the
conditions described i n Findings I, I1 and I11 may have occurred, i n part,
because of the frequent organizational changes. In the past eight years,
DOC has had several major reorganizations. In addition to changes i n
organizational structure, there is frequent turnover of the administrators
who oversee various functional areas or manage the institutions.
Since 1978 DOC has had three Directors and more than 14 reorganizations.*
The reorganizations have shifted the various functional areas, sometimes
recreating the same structure el iminated i n a previous administration.
For example, Health Services has been moved seven times i n the past eight
years. Ileal t h Services has been a separate division a t different times
and has also been combined w i t h other Department functions, such as
Conimuni ty Services, Operations and Administration. Heal t h ciare is
presently within the Human Resources and Development Division, a1 ong w i t h
personnel, s t a f f training, planning and f a c i l i t y activation.
In addition to changes i n organizational structure, there is frequent
turnover of the administrators who oversee various fur~ ctoin al areas cir
manage the institutions. For example, f i v e d i f f e r e n t administrators have
overseen the Department's Administration Division since 1582. Further,
Arizona State Prison Complex ( AsPC)- Florence has had four wardens and two
units have had several different deputy wardens since 1381. Sometimes
several changes take place w i t h i n a year's time. For example,
ASPC- Tucson's Santa Rita unit had three deputy wardens i n one year. One
Central Office staff member had e i g h t d i f f e r e n t supervisors i n a two- year
period.
JC According to the American Correctional Association, the averase
tenure for a Corrections Department director i s 19 months.
AREAS FOR FURTHER AUDIT WORK
During the course o f the a u d i t we i d e n t i f i e d several p o t e n t i a l issues t h a t
we were unable t o pursue because they were beyond the scope o f our a u d i t
or we lacked s u f f i c i e n t time.
Does the Department o f Corrections s u f f i c i e n t l y c o n t r o l v e h i c l e
assignment and use?
A1 though the Department o f Corrections has 699 vehicl es excluding AFZCOR,
there i s c u r r e n t l y no e n t i t y w i t h i n DOC'S Central O f f i c e to ensure t h a t
vehicles are being properly assigned and used. Several DOC employees
questioned many o f t h e v e h i c l e assignments. I n addition, some vehicles
appear t o be i n e f f i c i e n t l y used. For example, a t one f a c i l i t y a van was
being used f o r perimeter security. Inappropriate assignment and use of
vehicles may be c o n t r i b u t i n g t o the unnecessarily large f l e e t discussed i n
Finding I, page 3. Further a u d i t work i s necessary to determine the
extent of improper assignment and use, and the e f f e c t o f inadequate
control of vehicles.
Has the Department o f Corrections es tab1 i shed necessary control s
over fuel d i s t r i b u t i o n ?
DOC does not adequately c o n t r o l f u e l d i s t r i b u t i o n a t several
i n s t i t u t i o n s . At ASPC- Phoenix- A1 hambra and Catal ina Mountain Juvenil s
I n s t i t u t i o n , d a i l y fuel use i s not recorded o r tracked. ASP- Ft. Grant
Motor Pool recently began recording d a i l y fuel use, b u t l a r g e q u a n t i t i e s
of fuel have s t i l l been reported missing. In c o n t r a s t , t h e Federal Prison
i n Phoenix i n s t a l l e d a key control fueling system. The key control system
allows only authorized users access to fuel and automatically records each
f u e l i n g transaction. Key control and card control systems cost from $ 750
t o $ 10,000 do1 l a r s and can handle up to 10, OCO users. A1 though the system
costs more than a basic fuel system, the system could save money because
o f t h e increased control it provides. Further audi t work i s necessary to
determine t h e e x t e n t of inadequately c o n t r o l l e d fuel a t each f a c i l i t y and
i t s cost t o the Department.
6 Does the Department o f Corrections s u f f i c i e n t l y control
automotive parts and tools?
DOC vehicle maintenance shops may n o t adequately control automotive parts
and t o o l s usage. The performance a u d i t on DOC's Adult I n s t i t u t i o n s
Security ( Report No. 85- 12) found t h a t DOC d i d n o t adequately control
tool s a t the i n s t i t u t i o n s ' f a c i 1 i ty maintenance shops, ARCOR s i t e s and
other areas. During the review o f v e h i c l e maintenance, inadequate
controls over vehicle parts and mechanics t o o l s were observed a t two
i n s t i t u t i o n s . For instance, a t ASPC- Phoenix- A1 hambra, inmates have free
access to mechanics t o o l s and r e p a i r parts. Thus, p a r t s and t o o l s can be
st01 en by inmates. In addition, i n s u f f i c i e n t control over automotive
parts may have l e d t o t h e a l l e g e d misuse o f funds a t ASPC- Perryville
discussed i n Finding I, page 12. Further audit work i s necessary to
determine the adequacy o f controls f o r vehicle parts and t o o l s a t each
i ns ti t u t i on.
a Has the Department o f Corrections e f f e c t i v e l y managed i t s
operating supplies and equipment inventories?
The Department may not be e f f e c t i v e l y control 1 iny i t s operating suppl ies
and equipment inventories. A1 though DOC has es tab1 ished equipment
inventory control s and pol ic ie s, the Department ' s n~ ots recent inventory
i d e n t i f i e d more than $ 560,000 i n missing equipment. The missing equipment
i s e i t h e r the r e s u l t o f p o l i c i e s n o t being followed or items being stolen.
Central O f f i c e does not ensure t h a t the i n s t i t u t i o n s have procedures to
monitor i n v e n t o r i e s l i k e food, which c o n s t i t u t e s more than $ l( j n i l l i o n o f
DOC's budget. Thus, Central Office 1 acks a management information system
t o determine the effectiveness o f i n s t i t u t i o n s operating suppl ies
inventory management. In a d d i t i o n , d u r i n g v i s i t s t o several i n s t i t u t i o n s
we determined t h a t inventory controls were weak or nonexistent. For
example, a t Catal ina Mountain Juvenile I n s t i t u t i o n , when i tens are
delivered i n s t i t u t i o n a l personnel do not make an independent count o f tile
goods received. The lack o f s u f f i c i e n t control over operating supplies and
equipment may resul t i n mi smanagement, waste or theft. Further audit work
is needed to determine the adequacy of Central Office oversight of
operating suppl ies and equipment inventories.
APPENDIX
METHODOLOGY FOR DETERMINING VEHICLE OPERATING COSTS
F l e e t managers eval uate t h e i r f l e e t ' s e f f i c i e n c y and i n d i v i d u a l v e h i c l e
performance by monitoring t h e v e h i c l e s ' operating expenses. These costs
consist of a l l expenses d i r e c t l y r e l a t e d t o running a vehicle: f u e l , o i l ,
t i r e s and t i r e r e p a i r , and maintenance and r e p a i r . These expenses are
computed as costs per m i l e f o r each vehicle and can be r e f e r r e d to as
variable costs per mile ( VCM).
Because the Department o f Corrections ' i n s t i t u t i o n s do not maintain
adequate records, as discussed i n Finding I, page 11, it i s n o t possible
t o determine the exact VCM o f DOC'S f l e e t o r what the f l e e t ' s cost per
mile should be. Instead, Auditor General s t a f f compared the t o t a l vehicle
operating expenses f o r vehicles a t each DOC i n s t i t u t i o n to the estimated
t o t a l cost o f the f l e e t i f each i n s t i t u t i o n operated i t ' s vehicles a t a
c r i t e r i o n cost per mile. The c r i t e r i o n cost per mile f o r the various
types of vehicles was provided by the National Association o f F l e e t
Administrators, the Department o f Aami n i s t r a t i o n ' s ( DOA) tilotor Pool , the
Arizona Department o f Transportation ( ADOT) and the City o f Phoenix ( Table
7 \
TABLE 1
CRITERION COST PER MILE
VEHICLE TYPE
Cars
Pickups
4 X 4s
Vans
M i nibuses
Buses
1 ton trucks
1 .5 ton trucks
2 t o n t r u c k s
2.5 ton trucks
5 t o n t r u c k s
Boom trucks
Wreckers
Water trucks
Semis
F i r e trucks
U n i d e n t i f i e d large
trucks
SOURCE OF DATA
National Association o f
F l e e t Administrators
DOA Motor Pool
DOA l l o t o r Pool
DOA Motor Pool
City o f Phoenix
City o f Phoenix
ALj OT
City o f Phoenix
City o f Phoenix
City o f Phoenix
AD OT
City o f Phoenix
City o f Phoenix
ADOT
ADOT
City o f Phoenix
Average o f 1 ton
through 5 ton VCR
shown above
The c r i t e r i o n c o s t per m i l e used t o evaluate DOC's vehicles are the actual
o p e r a t i n g c o s t s of vehicles i n the i d e n t i f i e d category. Using these
f i g u r e s t o eval uate DOC's performance i s reasonable f o r several reasons.
1. The National Association o f F l e e t Administrators ( NAFA) annually
surveys i t s members t o determine t h e i r fl eets' operating costs
and reports t h i s data i n the form o f an average operating cost
per mile. The NAFA survey i s used by p u b l i c and p r i v a t e f l e e t
administrators t o evaluate t h e i r f l e e t s ' performance.
The City o f Phoenix and ADOT have heavy equipment s i m i l a r t o
DOC. These agencies evaluate t h e i r f l e e t s ' e f f i c i e n c y by
c a l c u l a t i n g VCM. Administrators f o r both f l e e t s noted t h a t t h e i r
f l e e t costs should be higher than DOC's f l e e t costs because o f
the nature o f t h e i r v e h i c l e s ' usage. For example, City o f
Phoenix t r a n s i t buses make frequent stops which lead t o costs as
much as f i v e times higher than buses t r a v e l i n g longer distances.
S i m i l a r l y , ADOT v e h i c l e s a r e used f o r heavy duty road work, such
as snow plowing and concrete hauling. Therefore, using the C i t y
o f Phoenix and ADOT's f l e e t s ' actual o p e r a t i n g c o s t s i s a
conservative comparison.
3. The c r i t e r i o n c o s t s i n c l u d e f u e l , l u b r i c a n t s , t i r e s and t i r e
r e p a i r s , and parts and labor f o r maintenance and r e p a i r . DOC's
costs a1 so i n c l ude the same components, however, DOC riiakes
extensive use o f inmate labor t o maintain i t s vehicles.
Consequently, DOC's labor costs are much lower than the costs
these otfier e n t i t i e s i n c u r t o r e p a i r t h e i r f l e e t s . Therefore,
DOC ' s o p e r a t i n g c o s t s si-~ oudl t h e o r e t i c a l ly be 1o wer than the
c r i t e r i o n costs.
The f o l 1 owing method01 ogy \/ as used t o cal cul a t e the approximate t o t a l
operating expenditures t h a t DOC i n s t i t u t i o n a l f l e e t s shoul d be i n c u r r i ng.
We contacted DOC t r a n s p o r t a t i o n personnel t o determi ne the
percentage c o n t r i b u t i o n t h a t v a r i o ~ s categories o f vetlicl es made
t o the t o t a l estimated r r r i l eage included i n the i n s t i t u t i o n ' s
budget request. This information i s presented i n Table 2,
Percentage o f Total k i i 1 eage col umn. This percentage bras
mu1 t i p l i e d by the t o t a l mileage t o o b t a i n t h e estimated i: lileage
for t h a t category. The estimated mileage f o r each category i s
presented i n the M i 1 eage col unn.
2. The estimated mileage was mu1 t i p l ied by the c r i t e r i o n cost per
m i l e to determine the t o t a l c o s t of i n s t i t u t i o n a l vehicles i f
they uere operating as e f f i c i e n t l y as the c r i t e r i o n f l e e t s . This
t o t a l cost i s the c r i t e r i o n cost.
3. C r i t e r i o n costs f o r each vehicle cstegory were combined t o obtain
the c r i t e r i o n t o t a l cost for each i n s t i t u t i o n , as shown i n the
Total rows o f Tab1 e 2.
4. Each i n s t i t u t i o n ' s actual vehicle operating costs were cal cul ated
with Arizona Financial Information System data and information
provided by DOC personnel, as shown i n Table 3.
5. The c r i t e r i o n t o t a l cost for each i n s t i t u t i o n ( from Table 2) was
compared with DOC'S actual t o t a l costs ( from Table 3) to
determine the variance between the costs t h a t the f l e e t should be
incurring versus t h e c o s t t h a t the f l e e t did incur. The
variances f o r each i n s t i t u t i o n are presented i n the Variance
column i n Table 4.
TABLE 2
CALCULATIONS USED TO DETERMINE CRITERION TOTAL COST
C r i t e r i o n
I n s t i t u t i o n Vehicle Cost Per Mile
ASPC- Fl orence Cars
Pickups
4 x 4
Vans
Buses
1 ton
1.5 ton
2 ton
2.5 ton
F i r e truck
Water
Misc. 1 arge
truck
Total
ASPC- Plloenix Cars
Pickups
Vans
Buses
1 ton
1.5 ton
Semi
Wrecker
2.5 ton
Total
ASPC- Tucson Cars 0.076
Pickups 0.12
4 x 4 0.126
Vans 0.135
Buses 0.56
1.5 ton 0.35
2.5 ton 0.58
F i r e truck 0.99
5 ton 0.96
Water 0.37
Total
ASPC- Perryvil l e Cars 0.076
Pickups 0.12
4 x 4 0.126
Vans 0.135
Buses 0.56
1 ton 0.3
2 ton 0.48
Boom 0.76
Water 0.37
Total
Percentage o f
Total M i 1 eaae M i 1 eage
C r i t e r i o n
Total Cost
C r i t e r i o n
Vehicle Cost Per Mile
Percentage o f
Total M i 1 eaae
C r i t e r i o n
I n s t i t u t i o n Total Cost
ASP- Ft. Grant
M i 1 eage
Cars
Pickups
4 x 4
Vans
Buses
1 ton
1.5 ton
2 ton
2.5 ton
Misc. 1 arge
t r u c k 0.53
F i r e t r u c k /
Tractor 0.59
Semi 0.62
Boom 0.76
Total
ASP- Safford Cars
Pickups
4 x 4
Vans
Buses
5 ton
1.5 ton
2.5 ton
Total
CblJ I Cars 0.076
Pickups/
4 x 4 0.12
Vans 0.135
I 4 i n i bus 0.26
Misc. Large 0.53
5 ton 0.96
Total
ACU I Cars 0.076
Pickups 0.12
4 x 4 0.126
Vans 0.135
1 ton 0.3
2.5 ton 0.58
Total
Source: Compiled by Auditor General s t a f f from v e h i c l e ' s percentage o f t o t a l mileage
data from DOC t r a n s p o r t a t i o n personnel and f i s c a l year 1984- 85 estimated
mileage f i g u r e s from DOC f i s c a l year 1985- 86 budcjet request and mileage data
from ASP- Safford. Actual mileage figures are not a v a i l a b l e for a l l
i n s i t u t i o n s because they have n o t c o n s i s t e n t l y recorded mileage.
TABLE 4
DOC INSTITUTIONS ACTUAL VEHICLE OPERATING
COSTS VERSUS CRITERION COSTS
FISCAL YEAR 1984- 85
Actual Vehicle Criterion Vehicle
Operating Costs Operating Costs Variance
ASPC- Fl orence $ 304,737.55
ASPC- Phoeni x 244,343.69
ASPC- Perryvil l e 243,439.74
ASP- Safford 147,948.70
ASPC- Tucson 174,577.96
ASP- Ft. Grant 222,511.21
Adobe Mountain
Juvenile I n s t i t u t i o n 26,889.11
Catalina Mountain
Juvenile I n s t i t u t i o n 32,660.07
Totals
Source: Compiled by Auditor General s t a f f from Appendix, Table 2 and
Table 3.
1601 WEST JEFFERSON
PHOENIX, ARIZONA 85007
( 602) 255- 5536
BRUCE BABBITT
GOVERNOR
June 27, 1986
Douglas R. Norton
A u d i t o r General
SAMUEL A. LEWIS
DIRECTOR
O f f i c e Of The A u d i t o r G e n e r a l
2700 North C e n t r a l , S u i t e 700 ' I
- -
Phoenix, Arizona 85004
D e a r M r . Norton,
The a t t a c h e d comments are p r o v i d e d f o r i n c l u s i o n i n t h e t e x t of
t h e p u b l i s h e d Performance Audit of t h e Department of C o r r e c t i o n s '
A d m i n i s t r a t i v e A c t i v i t i e s . These comments relate t o t h e Revised
P r e l i m i n a r y D r a f t Report which was p r o v i d e d w i t h your l e t t e r
d a t e d June 2 0 , 1986.
A s i n d i c a t e d i n o u r letters r e g a r d i n g t h e p r i o r d r a f t s of t h i s
r e p o r t , I am concerned a b o u t y o u r s t a f f ' s o m i s s i o n of c e r t a i n
i n p u t t h a t was p r o v i d e d by our Department t o c o r r e c t e r r o r s and
i n a c c u r a c i e s i n t h e r e p o r t . F u r t h e r m o r e , t h e r e p o r t d o e s n o t
acknowledge t h a t t h e Department brought many of t h e i t e m s d i s -
cussed t o your s t a f f ' s a t t e n t i o n . A s you are aware, t h e Depart-ment
is i n t h e p r o c e s s of c o r r e c t i n g many of t h e s e d i s c r e p a n c i e s .
I must n o t e t h a t your a u d i t o r s t o o k over s i x months t o compile
t h e s e c t i o n of t h e r e p o r t p e r t a i n i n g t o v e h i c l e s . I n pre-v
i o u s d r a f t s , t h e y compared t h e D e p a r t m e n t ' s c o s t p e r m i l e t o
an i n d u s t r y a v e r a g e . Your s t a f f c i t e d a c o s t p e r m i l e of e i g h t
c e n t s . A f t e r minimal r e s e a r c h on o u r p a r t , it was d e t e r m i n e d
t h a t t h i s c o s t was t o t a l l y e r r o n e o u s . A s a r e s u l t , t h e r e v i s e d
r e p o r t now states t h a t i n s t e a d of s p e n d i n g $ 900,000 t o o much
on v e h i c l e s maintenance, a b e t t e r f i g u r e is is $ 450,000.
A s an example of your s t a f f ' s n e g l e c t of t h e facts is t h e d i s -
c u s s i o n of v e h i c l e s i n which t h e f i n a l r e p o r t compares t h i s
Department's c o s t p e r m i l e t o t h a t of a combination of DOA, DOT
and t h e C i t y of Phoenix. Why w a s n ' t DOC compared w i t h o t h e r
c o r r e c t i o n a l a g e n c i e s ? W e r e p e a t e d l y asked t h a t c o n s i d e r a t i o n be
given t o t h e c o n d i t i o n s under which o u r v e h i c l e s are o p e r a t e d .
W e have unpaved d i r t r o a d s around o u r s e c u r e p r e i m e t e r s which
are hot and d u s t y i n t h e summer and mud i n t h e w i n t e r . Our
c o s t p e r m i l e is h i g h due t o t h e w e a r on t h e v e h i c l e and t h e
f a c t t h a t some v e h i c l e s i d l e at areas of t h e p e r i m e t e r o r are
d r i v e n at f i v e o r t e n m i l e s p e r h o u r a r o u n d t h e p e r i m e t e r .
Although you d i d not compare our v e h i c l e c o s t s t o o t h e r cor-r
e c t i o n a l a g e n c i e s , you d i d unfavorably compare us t o o t h e r
c o r r e c t i o n a l a g e n c i e s i n t e r m s of t h e number of v e h i c l e s p e r
employee. My s t a f f pointed out t h a t we had f i g u r e s f o r t h e
S t a t e s of New Mexico and Oklahoma i n which we w e r e compared
very f a v o r a b l y . Your comparison d i d not c o n s i d e r t h e l o c a t i o n
o r t h e c l u s t e r i n g of f a c i l i t i e s w i t h i n t h e stater , T& is would,
as i n t h e case of F l o r i d a , e l i m i n a t e a l a r g e number of v e h i c l e s
because many of F l o r i d a ' s f a c i l i t i e s are c l u s t e r e d i n v a r i o u s
p o i n t s throughout t h e state. W e f e e l t h a t your comparisons are
i r r e l e v a n t and of l i t t l e use t o t h i s Department.
W e do agree t h a t our v e h i c l e s are high- mileage a n d , when
coupled with t h e i r age, a r e more c o s t l y t o o p e r a t e than new
v e h i c l e s . W e b e l i e v e , however, t h a t we should have been
commended f o r being a b l e t o d r i v e more than f i v e m i l l i o n v e h i c l e
m i l e s i n a given y e a r w i t h as few problems and as low a c o s t
as we are c u r r e n t l y o p e r a t i n g .
Another example o f y o u r s t a f f ' s d i s r e g a r d f o r r e a l i t y is t h e
statement t h a t t h e Adult Information Management System ( AIMS)
i n i t i a l Budget Request was exceeded by at least $ 575,535; o r
50 p e r c e n t . This statement was d i s c u s s e d with your s t a f f and
documentation w a s provided t o prove o t h e r w i s e , yet we w e r e
ignored. The f a c t is t h a t t h e i n i t i a l Budget Request f o r t h e
AIMS System w a s approximately $ 1.4 m i l l i o n and was subsequently
a d j u s t e d t o $ 1.5 m i l l i o n e a r l y i n t h e budget p r o c e s s .
One l a s t i t e m must be added which f u r t h e r r e f l e c t s on t h e
q u a l i t y of t h e r e p o r t and i t s accuracy i n p r e s e n t i n g f a c t s . In
t h e s e c t i o n e n t i t l e d , " AREAS FOR FURTHER AUDIT WORK", a s t a t e -
ment is made t h a t we do not monitor f u e l consumption at C a t a l i n a
Mountain J u v e n i l e I n s t i t u t i o n ( C M J I ) . This is t r u e . The
reason f o r t h i s is t h a t we have no gas pumps t h e r e . The
underground s t o r a g e r e f e r r e d t o is d i e s e l f u e l f o r t h e emergency
g e n e r a t o r s and not f o r v e h i c l e use.
These i n s t a n c e s cause me a g r e a t d e a l of concern with t h i s a u d i t
r e p o r t . Other s p e c i f i c s i n t h e r e p o r t a r e d i s c u s s e d i n t h e
a t t a c h e d .
S i n c e r e l y ,
Attachment
SAL / RHA / g
F I N D I N G I
THE DEPARTMENT OF CORRECTIONS'S VEHICLE FLEET IS POORLY MAINTAINED
The Department disagrees with this statement. The Department has done a
commendable job of maintaining what we agree is an aging and high- mileage vehicle
fleet. The Department should be commended for it's ability with limited resources,
inadequate maintenance facilities and our recent explosive growth, to be able to do the
job it has done.
RECOMPIIENDATION I - DOC SHOULD ESTABLISH A STANDARDIZED
DEPARTMENTAL PROGRAM
The Department concurs with this recommendation and has taken s t e p s to implement t h i s
while the auditors were in the process of conducting this audit.
RECOMMENDATION 2 - DOC SHOULD REVIEW AND UPGRADE ITS VEHICLE
MAINTENANCE FACILITIES
The Department of Corrections has already accomplished this and pointed o u t t o the
auditors as was stated in their report that studies were conducted. Further, an item
which is not stated but which was pointed out to the auditor was that funds were
requested to construct a maintenance facility at Perryville as the first step in this
process. The $ 695,000 budget request was denied. It should be noted t h a t t h e
Department has, on several occasions, requested monies to properly upgrade i t s vehicle
facilities but has been unsuccessful in obtaining the proper funds.
RECOMMENDATION 3 - ONCE DOC HAS ESTABLISHED A BETTER MAINTENANCE
PROGRAhl AND IMPROVED ITS FACILITIES, TI- IE DEPARTMENT SHOULD UPGRADE
ITS FLEET.
The Department would very much like to upgrade its fleet and has requested a
substantial amount of money in the past to upgrade its vehicles. Due to the emphasis on
construction of new facilities, the requests have gone unfunded. It should be noted t h a t
t h e Department e s t i m a t e s if it replaced all vehicles which are over ten years old or have
a mileage reading of 100,000, i t would cost $ 2.5 million. This far exceeds t h e estimated
annual savings of $ 450,000 projected by the auditors.
Several o t h e r comments must be made concerning the discussions and conclusions drawn
by the auditors in this section of the audit report. First, i n i t i a l drafts of this report
attempted t o compare the Department's cost per mile to an industry average of
approximately eight cents per mile. Even though the auditors took approximately one
year to compile this audit, i t took the Department one week to realize that the figure
quoted ( 8~) w ould hardly pay for the fuel for an average vehicle t h e Department
operates, such as vans, trucks and busses. The comparison with an industry f l e e t a v e r a g e
of average o f passenger vehicles was a totally unfair comparison. This resulted in a
completed revision with comparison of this ilepartment now to a composite average of a
fleet composed of DOA, DOT and City of Phoenix vehicles. Despite a great deal of
discussion from this Department concerning tile conditions in which our vehicles are
operated, such as using sedans on perimeter patrol or light trucks which travel five to ten
miles per hour and stand idling at various places around perimeters for hours on end, no
recognition is made of this in the audit report.
No mention has been made of t h e amount of money requested to replace vehicles in the
past or t h e amount of money requested to upgrade vehicle facilities, even though this
information was provided to the auditors.
The central theme of this report i s t h a t mis- management, poor maintenance and a lack
of vehicle replacement program have resulted in excess expenditures of $ 443,370 in the
operation of our fleet. These operating costs for the Department of Corrections are
compared to the Department of Administration, the Department of Trarnsportation and
the City of Phoenix, We feel this is a very poor comparison because the Department of
Corrections in no way resembles the usage of the these operators.
There are forty- nine other states operating correctional f a c i l i t i e s and none of these were
chosen f o r c o s t comparison. Correctional vehicles o f t e n s i t on security posts with the
engine running and . naturally t h e c o s t per mile would be higher. Further, our vehicles are
operated on perimeter roads that are unpaved, dusty and hard on vehicles. At best, an
officer is able to travel only five to ten miles per hour. All of this adds up to more cost
and abuse to the vehicle than normal operations.
The other comparison of fleet s i z e t o t h e number of staff leaves a lot t o b e desired. It
does n o t t a k e into consideration the prison layout, distribution of prisoners throughout
t h e S t a t e , and inmate intake and reception practices. The states we have been compared
t o o p e r a t e on a clustered prison concept, in that several institutions are located within
close proximity of each other. The State of Arizona has chosen to build and operate
prisons in remote locations and will be likely to continue to do so in the future. As a
result, there will be a continued need for a large vehicle fleet. As a matter of f a c t , this
Department provided the auditors s t a t i s t i c s to compare the number of vehicles per staff
between our state, New Mexico and Oklahoma which operate facilities spread throughout
the state. In both instances, we are compared favorably as Oklahoma's ratio is eight to
one and New Mexico's ratio is the sam