Senate Health & House of Representatives Human Services Committee of Reference Report: Governor's Council on Developmental Disabilities

              Senate Health & House ofRepresentatives Human Services
Committee ofReference Report
GOVERNOR'S COUNCIL ON
DEVELOPMENTAL DISABILITIES
Date: December 15,1998
To: Joint Legislative Audit Committee
Randall Gnant, Co-Chair
Barry Wong, Co-Chair
Pursuant to Title 41, Chapter 27, Arizona Revised Statutes, the Committee of Reference,
after preforming the sunset review and conducting a public hearing, recommends:
The Governor's Council on Developmental Disabilities be continuedforfive years.
COMMITTEE OF REFERENCE
Elaine Richardson
'-...-
rr~ r. r~~
Marion L. Pickens
(~&ttCZ
Rebecca Rios
Senate Health & House ofRepresentatives Human Services
Committee ofReference Report
GOVERNOR'S COUNCIL ON
DEVELOPMENTAL DISABILITIES
Background
Pursuant to ARS § 41-2953, the Joint Legislative Audit Committee assigned the sunset review
ofthe Governor's Council on Developmental Disabilities (Council) to the Senate Health and House
ofRepresentatives Human Services Committee ofReference.
The Council was established in 1983 as the state's advocacy and planning body for persons
with developmental disabilities. There are approximately 83,000 developmentally disabled people in
Arizona.
ARS § 36-551 defines "developmental disability" as a severe, chronic disability of a person
that:
• is attributable to mental or physical impairment such as mental retardation, cerebral palsy,
epilepsy or autism.
• is manifest before age 18.
• is likely to continue indefinitely.
• results in substantial functional limitation in three or more of the following areas of major life
activity: self-care, receptive and expressive language, learning, mobility, self-direction,
capacity for independent living and economic self-sufficiency.
• reflects the need for a combination and sequence of individually planned or coordinated
special, interdisciplinary or generic care, treatment or other services that are oflifelong or
extended duration.
The 23-member, governor-appointed Council is charged with ensuring that persons with
developmental disabilities receive the care necessary for them to reach their maximum potential. The
Council achieves this charge primarily through contracts with six regional district councils, located
in Apache Junction, Benson, Kingman, Prescott, Scottsdale and Tucson. The six district councils are
not-for-profit entities that: (1) provide advocacy, such as informing the Council about problems
facing developmentally disabled citizens in their local communities; (2) provide information regarding
local service providers and services offered; and (3) refer developmentally disabled citizens and their
families to needed services. For Arizona, the 1998-2000 state plan focuses on four major goals:
leadership/self-determination, education, employment and family support.
2
Committee Sunset Review Procedure
The Committee ofReference held two public meetings; the first on October 13, 1998, and the
second on December 15, 1998, to review the performance audit report of the Council, prepared by
the Office ofthe Auditor General (OAG), and to receive testimony. The Committee heard testimony
from representatives ofthe OAG, the Executive Director and members of the Council and the Office
of the Governor.
OAG staffreviewed the performance audit report for the Committee, including their findings
and recommendations. OAG staff responded to members' questions and concerns regarding contracts
and funding of regional district councils. The Council's Chairman testified that the Council agreed
to the findings and recommendations contained in the audit and said the Council will continue to
implement those recommendations.
The OAG audit recommendations to enhance district council contract monitoring include:
• Reviewing its regional district council contacts to ensure all Council goals and objectives are
addressed.
• Holding its district councils to all contract specifications by continuing to:
~ review and compare district council quarterly reports against contract specifications;
~ conduct regular site visits ofits district councils; and
~ review district council independent audit reports.
• Continuing to withhold district council funding for nonperformance of contract specifications.
• Revising district council contracts to reflect more outcome-based performance measures.
• Considering a Request for Proposal process to ensure contract specifications are effectively
met.
Committee Recommendations
The Committee recommended the Governor's Council on Developmental Disabilities be
continued for five years.
Sunset Report Requires Pursuant to ARS§ 41-2954
I. Identification of the problem or need that the agency is intended to address
The Council was established under the direction of the federal Developmental
Disabilities Council State Grant Program to invest in innovative strategies to: (1) coordinate
and improve the delivery of services; (2) promote inclusion of people with developmental
disabilities in community life; and (3) assist in developing quality services and supports in the
community as alternatives to costly institutionalization.
3
ll. Statement of the objectives of the agency and its anticipated accomplishments
The federal and state laws governing the Council require the Council to plan and
monitor treatment and services to ensure that persons with developmental disabilities receive
the care necessary for them to reach their maximum potential; and promote the development
of a consumer and family-centered comprehensive system and a coordinated array of
culturally competent services, supports and other assistance designed to achieve
independence, productivity and integration and inclusion into the community for individuals
with developmental disabilities.
The Council has operated within the public interest by assisting developmentally
disabled citizens and their families through promoting changes in the developmental
disabilities service delivery system, advocacy and increased independence. Specifically, the
Council works toward four principal goals:
1. Self-Determination/Leadership Development - Providing increased independence for
individuals and their families through participation in self-advocacy training so they have
knowledge and control over their own lives.
2. Education - Providing advocacy for a free appropriate public education for all students
with disabilities, including adequate funding for related services. Provides training in
education advocacy and promotes a fair due process system and dispute resolution when
students are not receiving appropriate education and necessary related services.
3. Employment - increasing opportunities for individuals to become employed through
changes in public policy and demonstration ofan entrepreneurship project.
4. Family Support - Providing advocacy for increased implementation of family and
individual supports within the community and through grassroots involvement offamilies
in formal Family Support Groups.
ID. Identification of any other agencies with similar, conflicting or duplicative objectives
and an explanation of the manner in which the agency avoids duplication or conflict
with other such agencies
The Council is the only agency that serves as a statewide advocate and funds projects
to identify and meet the needs of Arizona's developmentally disabled citizens.
IV. Assessment of the consequences of eliminating the agency or of consolidating the
agency with another agency
Although termination of the Council would not significantly harm the health, safety
or welfare ofArizona's citizens, the State's developmentally disabled population would lose
its advocate for promoting and meeting the needs of individuals with developmental
disabilities and their families. Additionally, without a Council, the State would not be eligible
to receive its allotted share offederal money.
4
Attachments
1. Minutes of the Senate Health and House Human Services Committee ofReference
2. Performance Audit Report
5
f/ . ~I . ; I: /1/",,:, ~-··.,..t" (,-.. ~. ~..,.-.
ARIZONA STATE LEGISLATURE
MEETING NOTICE
OPEN TO THE PUBLIC
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMIITEE OF REFERENCE
ON
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES
DATE:
TIME:
PLACE:
Tuesday, October 13, 1998
10:00 a.m.
Senate Hearing Room 2
AGENDA
1. Call to Order - Opening Comments
2. Presentation of Auditor General Performance Report
3. Response by Council
4. Public Testimony
5. Discussion and Recommendations of Committee
6. Adjourn
MEMBERS:
Senator Ann Day. Cochair
Senator Sue Grace
Senator Randall Gnant
Senator Sandra D. Kennedy
Senator Elaine Richardson
9/30/98
JB/jas
Representative Freddy Hershberger. Cochair
Representative Barbara Left
Representative Rebecca Rios
Representative Marion L. Pickens
Representative Mark Anderson
Persons with a disability may request a reasonable accommodation, such as a sign language interpreter, by contacting the Senate
Secretary's Office at (602) 542-4231 (voice). Requests should be made as early as possible to allow time to arrange the accommodation.
ARIZONA STATE LEGISLATURE
Senate Health and House Human Services
Committee of Reference
on
The Governor's Council on Developmental Disabilities
Minutes of the Meeting
Tuesday, October 13,1998
10:00 a.m., Senate Hearing Room 2
Members Present
Senator Day, Co-chair
Senator Gnant
Senator Grace
Representative Hershberger, Co-chair
Representative Anderson
Representative Leff
Representative Pickens
Representative Rios
Members Absent
Senator Kennedy
Senator E. Richardson
Staff
Mark Barry, House Research Analyst
Heather Baker, Senate Research Intern
Other attendees
(Attachment A)
Co-chair Day called the meeting to order at 10:10 a.m. and attendance was noted.
Presentation of Auditor General Performance Report
Miriam Seymore, Senior Auditor, The Office of the Auditor General, distributed the
Auditor General's Performance Audit to committee members (Attachment B) and gave an
overhead presentation entitled Governor's Council on Developmental Disabilities
Performance Audit and Sunset Review (Attachment C). Her testimony is attached to the
minutes. (Attachment D)
In response to Senator Day, Ms. Seymore explained a Council contract is a contract
between the Council and a district. Because the districts are set up as non-profit 501 C3
corporations, they are able to enter into other contracts. For example: one district has a
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
Page 2
October 13, 1998
contract with the rehabilitative services administration at the Department of Economic
Security (DES), and another district is under a contract to help increase transportation
options for developmentally disabled citizens in their local communities. Ms. Seymore
stated in one case she discovered that a district director was working full-time under a non­council
contract while at the same time his Council contract also specified his position as
full-time and in both cases the director was taking the salary that was commensurate with
two full-time positions.
Senator Day asked if any other agency other than the Auditor General's office has ever
reviewed the Governor's Council in the last ten years. Ms. Seymore stated that prior to the
current Council management, which came into place in June of 1997, independent audit
reports and quarterly progress reports were not reviewed and site visits were not regularly
conducted. However, under the current Council management this information is being
reviewed. She stated this information is being compared against contracts, district
progress is being tracked and the districts are being provided with specific feedback on
how they need to improve their operations.
In response to Representative Anderson, Ms. Seymore explained that only one entity can
perform the duties required in a sole source contract. She noted the districts have been
in place since the late 1970's - early 1980's and were set up for the purpose of filling
contract needs of the Council. Currently, there are many other sources available for use
by the Council outside of the districts which is why the Auditor General's office is
recommending requests for proposal. Ms. Seymore stated this process would allow the
Council to assess the best options relating to cost available to the Council and location of
services. She noted the districts would then compete with other entities to provide services
needed by the Council.
Senator Day asked what agency is responsible for monitoring non-council contracts. Ms.
Seymore stated that each district has a governing board that is responsible to monitor the
district's day-to-day operations and all non-council contracts.
Ms. Seymore stated in the past, the districts wrote their own contracts and submitted
contracts for activities they were going to perform along with a budget which would state
where all the money was being spent. That information was all the Council received. If
prior management of the Council had reviewed the independent audit reports it would have
known about the non-council contracts. Current management has requested that districts
now disclose all sources of revenue. Ms. Seymore noted that is why one of the
recommendations of the Auditor General's office is that the Council have a better handle
on all the activities being performed by it's districts because the non-contracted activities
could impact the Council's portion.
Page 3
October 13,1998
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE ON REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
Senator Day commented that the process to keep track of the entire process sounds
confusing.
Representative Pickens asked what the responsibilities of the six staff members of the
Council have been and have those responsibilities been changed since the observation
that not enough oversight has been made. Ms. Seymore explained three or four of the
Council's staff are new. She stated there may have been problems in the past with Council
staff, but there are now clearly defined duties; one staff person is the legislative liaison, one
staff person is in charge of district contracts, reviewing district quarterly reports, and
coordinating site visits; two positions are administrative; and the remaining position is the
Executive Director.
Representative Pickens asked if the district councils have been providers as opposed to
some outside contract. Ms. Seymore explained the federal government gives the Council
$835,000 of which 65% must go out to develop and fund projects. Most of the 65% is paid
to the districts and the districts must have an office where public inquires can be made in
regard to developmental disabilities services and information. Ms. Seymore noted the
Council can also specify in the contracts specific projects that the district must perform; ie:
having a representative go out to certain populations in the State such as an Indian
Reservation, where culture and language could be barriers and work as one-on-one
liaisons for the district and for the Council. The districts serve to provide advocacy, deliver
and gather information and to work on specific projects. The districts themselves do not
provide specific direct services such as the DES Division of Developmental Disabilities.
The districts provide the information flow and the gathering and dissemination of data
which is a valuable service. Ms. Seymore stated the districts are the only entities on a local
level to obtain "grassroots" input and provide one-on-one services for citizens with
developmental disabilities.
Senator Day commented the Council seems very bureaucratic and opined it is difficult to
understand. She asked for the representative from the Council to testify.
Susan Madison, Executive Director for the Governor's Council on Developmental
Disabilities, stated that she was available to answer questions and deferred to the
appointed council member to give the Council's response.
Helen Baldino, Chair of the Governor's Council on Developmental Disabilities,
testified that she is the mother of two children with disabilities. She stated the Council
agrees with the findings and recommendations of the Auditor General's Performance Audit
and said the Council will continue to implement those recommendations.
Ms. Baldino remarked the Council was established under Arizona statute and the members
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
Page 4
October 13, 1998
are persons with developmental disabilities, family members of developmentally disabled
individuals and representatives from various state agencies and other agencies that
provide services to the developmental disabled. She stated the Council is mandated under
federal law to provide advocacy and services and receive all funds from the federal
government. Ms. Baldino stated as a requirement under federal law, the Council prepares
a three-year plan identifying major issues that face the developmentally disabled within the
state. She noted the Council is in the second year of the three-year plan which began in
1998 and continues through 2000. Ms. Baldino noted the current three-year plan focuses
on four major areas: leadership and self determination for the developmentally disabled;
education services; employment opportunities and training; and family support to assist
families. In addition to the three-year plan, the Council also has an on going involvement
in legislative advocacy, which specifically is the roll of the legislative liaison. She noted the
Council is also sensitive to the cultural diversity found in Arizona and recognizes the need
to have a culturally competent system of care throughout the state. Ms. Baldino stated the
Council currently contracts with six district advisory councils that represent the geographic
areas of the state, with the Center for Disability Law, and partners with other Arizona
organizations, such as the University Affiliated Program to work together in support of
programs for the disabled.
In response to Representative Hershberger, Ms. Baldino commented that the Council is
well aware that there have been significant problems in the past with the monitoring of
district contracts and stated the Council recognizes the need to be much more diligent in
the future. She opined the Council has made significant strides during the past year which
reflect in the Auditor General's report.
In response to Senator Day, Ms. Baldino opined that the Council, the mechanism that runs
the work of the council and the staff are there to assist in fUlfilling the objectives of the
Council.
Senator Gnant, referring to page 14, section 3 of the audit report, asked Ms. Baldino to
expand on the topic, the intent to which the Council has operated within the public
education. (Attachment B)
Ms. Baldino stated that one of the goals for the current three-year plan is that special
education be available to every child within the state with a need for it. She added the
Council wants to expand services to include assistive technology, physical therapy and
speech therapy. Ms. Baldino commented that as a parent of developmentally disabled
children who receive special education, she is aware that this issue is of particular
importance to parents of developmentally disabled children. She noted the Council has
always made this issue a high priority.
PageS
October 13,1998
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE ON REFERENCE ON THE GOVERi"JOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
Senator Gnant asked if the Council has taken a position as to how that special education
is to be delivered in a public school setting specifically.
Ms. Baldino opined that most parents with developmentally disabled children want to have
their children integrated into the school system to the greatest extent possible. She stated
the Council expects and advocates for full inclusion of the children to the extent possible
and recognizes that this is not for every child.
Senator Gnant asked if the Council has recommended or has staff taken as it's policy an
advocacy position that the special education services be provided wherever possible
withing the existing schools.
Ms. Baldino stated she did not know whether the Council has specifically enunciated that
policy, but it is the prevailing view of the Council that children should be included and
integrated to the greatest extent possible in the education system. Ms. Baldino stated she
was not aware that this concept is or is not one of the legislative positions the Council has
currently taken.
Senator Grace stated there are other facilities that are publicly funded that do not provide
the services directly within the school district. She asked if the Council is involved with the
monitoring of these facilities with the same degree as the public schools.
Ms. Baldino stated the Council represents all children with disabilities and advocates on
behalf of all children with special needs regardless of location.
Representative Pickens, referring to the paragraph on employment on page 14, section 3
of the audit report (Attachment B), asked if there has been any attempt to promote any kind
of economic jobs that provide employment for those with developmental disabilities.
Ms. Baldino stated that one goal in the current three-year plan is to provide persons with
disabilities the opportunity to become self employed. She stated it is the Council's objective
to make that opportunity available not only in the metropolitan areas, but in the rural areas
as well.
Representative Pickens asked if this goal is to demonstrate how that can happen or are
there places where economic employment is actually being promoted which would provide
work for those individuals with developmental disabilities.
Ms. Baldino stated that the Council sees the project as enabling persons with disabilities
to learn the process to make the right connections within the community. She stated it is
an enabling project in the sense that the Council will show or assist people to learn what
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
Page 6
October 13, 1998
they need to do to become self-employed and what connections they need to make in the
particular geographic area to ensure long lasting success.
In response to Representative Pickens, Ms. Baldino stated in the past there were different
mechanisms by which the Council determined funding sources for various districts, such
as geographic size, population considerations and others. She stated that in more recent
contracts, there have been equal amounts allocated to each of the districts, rather than
basing the funding on other factors.
David Cutty, representing the Arizona Association of Providers for People with
Disabilities, and Council member, testified that many of the adverse findings that
resulted from the Auditor General's Office report date back several years. He noted that
he has been on the Council for over four years and has a historical perspective as a
Council member. Mr. Cutty stated prior to the hiring of the current executive director, the
Council had a part-time interim appointed executive director who was actually on loan from
DES. He opined this interim period lasted longer than six months. Prior to this time, there
were substantial issues related to the operation of the council, some related to the prior
director that remained unresolved at the time of that directors departure from the council.
Mr. Cutty stated that during the same time period, DES provided all the budget and
accounting support to the Council and accurate financial data was often not available for
months. Mr. Cutty opined that, in deference to the audit report, Council staff did not have
good financial accounting data to fully understand what was happening in the districts. He
described the council during this period of time as dysfunctional and other Council
members reported to DES as the lead agency overseeing the Council's activities at that
time.
Mr. Cutty noted the process of selecting the new executive director was protracted partially
because the hiring process itself is prescribed by state personnel rules and because the
council had decided to perform a national search to ensure that the most capable and
effective candidate would be selected. He reiterated Ms. Baldino's comments that the
Council members and staff are committed to implementing all the recommendations by the
Auditor General's Office so as to ensure that these contracts and financial anomalies do
not repeat themselves.
Mr. Cutty stated the Council has accomplished a tremendous amount over the last several
years. It has served as lead agency for system change in Arizona in the areas of special
education, family support, consumer empowerment, employment and self sufficiency,
public awareness and related issues. He stated many peoples lives have benefited
enormously from the work of the Council. He clarified that not all of the Council's work and
achievements occurred through the districts. He noted the staff is very dedicated and hard
Page 7
October 13,1998
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE ON REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
working and many of the accomplishments of the council have been the result of staff
taking the lead and the 23 Council members donating a tremendous amount of time to
ensure the goals of the Council are being achieved and ,are progressing.
Mr. Cutty stated that many of the concerns over the Council's past record have been
addressed and with the new leadership in place to better serve the citizens of the state with
developmental disabilities and to ensure the accountability for the federal dollars that
finance the Council's activities, he expressed his hope that the Legislature would seriously
consider continuing the Council.
In response to Representative Pickens, Mr. Cutty stated currently the council has 20
members and during the last four years, most attendance has been approximately 80%.
Karen Van Epps, Council member, testified she has been a member of the Council for
the ten years and stated historically it has always been a problematic situation in
determining how to best use both the Council and the districts. She stated her concern,
given the problems that have existed in the past, that the Council be given a chance to
complete its goals for this year. Ms. Van Epps clarified that the districts do not write their
own contracts. She noted one of the difficulties that existed last year was having a DES
staff member acting as Executive Director and stated several councils in the country are
"stand alone" agencies. At the last meeting it was suggested that changing the Council
into an independent body as opposed to being channeled through DES as the designated
agency.
Senator Day stated she did not understand the rational that the Council has a better
chance to become effective if changed into an independent body.
Ms. Van Epps noted that federal regulations state the designated agency should not be
the agency that provides services to persons with developmental disabilities. She noted
DES provides 99.9% of the funding to people with developmental disabilities through the
Division of Developmental Disabilities.
Senator Day asked how DES curtails the Council's independence. Ms. Van Epps stated
DES does not actually curtail the Council, but it is a powerful perception that the Council
is a part of the agency.
Senator Day stated she did not agree and noted that many agencies have advisory
councils and opined that the Council, as well as being an advocacy group, being advisory
to the agency of DES makes sense.
Ms. Van Epps stated the Governor's Council on Developmental Disabilities is not an
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
Page 8
October 13,1998
advisory council. She noted the Council is federally funded and stated the Council is to be
an oversight for people with developmental disabilities within the state that works with
various different state agencies.
In response to Senator Day, Ms. Van Epps stated there have always been only six staff
members: two staff for administration, one for legislative concerns, one as a project
planner, one for overseeing all the district contracts, and the executive director. Ms. Van
Epps stated 35% of the budget can be used for operating expenses with the Council.
Ms. Van Epps opined there will be better oversight from the Council as well as the staff to
accomplish the goals that have been set.
In response to Representative Leff, Ms. Madison stated the role of the Council from the
federal government is to provide advocacy, systemic change and planning and
coordination with big systems, such as the Division of Developmental Disabilities which
runs group homes and vocational rehabilitation. She opined that although it is a long
process, there have been many changes to make services for the developmentally
disabled more effective. Ms. Madison stated the Council does make recommendations
regarding contracts.
Senator Day noted the Council members are a very dedicated group of people and opined
the Council is needed to provide the services needed for the developmentally disabled.
She stated her concern with the Council contracting with the districts.
Representative Anderson suggested the Request for Proposal (RFP) recommendation
(Attachment B, page 11) should be implemented so that the districts are no longer the only
entity and perhaps, through the competitive process, there may be a more direct route for
services.
Ms. Madison stated that all of the Auditor General's Office recommendations would be
included in the Council's operation.
Senator Grace applauded the Auditor General's Office in it's effort to help the Council
improve the contracting process and stated her concern with not having a clear
understanding of the role and objective of the Council outside of clearing up a contract
process that needs to be clarified and more closely monitored.
Senator Day agreed with Senator Grace's comments regarding the need for clarification
of the Council's role and the contracting process. She stated that she would like to hear
from DES about how the whole system works and noted it is not necessary for the
Committee to take specific action today.
Page 9
October 13, 1998
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE ON THE GOVERNOR'S
COUNCIL ON DEVELOPMENTAL DISABILITIES
In response to Representative Leff, Ms. Madison stated several of the Auditor General's
Office recommendations have already been implemented. She reiterated there have been
problems with the lack of oversight of district contracts, but changes have been
implemented to address this.
Senator Day stated more information is needed before a decision can be made whether
to continue with the current structure, role and objective of the Council.
Representative Hershberger asked for a summary of the federal law requirements before
the Committee makes a decision.
Senator Day opined the Council is a valuable advocacy tool, but she has concerns
regarding what other responsibilities it has.
There being no further business, the meeting was adjourned at 11 :40 a.m.
Respectfully submitted,
~~~
Tracey Moulton
Committee Secretary
(Tapes and original minutes on file in office of the Secretary of the Senate.)
MEETING OF COMMITTEE ON
GO'-Ceo'Jcx~ ~e;\ ~ \)e-.ce\c\?ttC-N-\o...\ \::~..::>a.~\ \'\.c...~
NAME REPRESENTING
!J£LEIJ i3AwIlJo (JOU COUAJelL tJlJ DO
-rrQ\tt'. ~Q\J\\.s-,~A\D C-.r Df)
Ktvcbu ()t£1,( r;:AJO~ haLl. (!tJUhc!i" I- tJA.- D()
BILL NO.
R ill r,1tl. J A~r:J /1./
ARIZONA STATE LEGISLATURE
MEETING NOTICE
OPEN TO THE PUBLIC
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE
ON
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES
DATE:
TIME:
PLACE:
Tuesday, December 15, 1998
10:30 a.m.
Senate Appropriations Room 109
AGENDA
1. Call to Order - Opening Remarks
2. Public Testimony
3. Discussion
4. Committee Recommendation
5. Adjourn
MEMBERS:
Senator Ann Day
Cochair
Senator Sue Grace
Senator Randall Gnant
Senator Sandra D. Kennedy
Senator Elaine Richardson
12/4/98
JB/jas
RepresentativeFreddyHershberger
Cochair
Representative Barbara Left
Representative Mark Anderson
Representative Marion L. Pickens
Representative Rebecca Rios
Persons WIth a disability may request a reasonable accommodation, such as a sign language interpreter, by contacting the Senate Secretary's
Office at (602) 542-4231 (voice). Requests should be made as early as possible to allow time to arrange the accommodation.
ARIZONA STATE LEGISLATURE
Forty-third Legislature - Second Regular Session
Committees of Reference
on the
Governor's Council on Developmental Disabilities
Minutes of the Meeting
Tuesday, December 15, 1998
Senate Appropriations Room 109, 10:00 a.m.
Tape 1, Side A
Senator Day, Co-chair
Senator Gnant
Senator Grace
Senator Kennedy
Senator E. Richardson
Members Present
Representative Hershberger, Co-chair
Representative Leff
Representative Rios
Members Absent
Representative Anderson
Representative Pickens
Staff
Jason Bezozo, Senate Research Analyst
John Barry, House Research Analyst
Speakers
Jodi Beckley, Governor Hulls's Office
Guest list (Attachment A)
Senator Day called the meeting to order at 10:40 a.m. and announced that the Committee
members are prepared to move that the Council be extended for 5 years.
PUBLIC TESTIMONY
Jodi Beckley, Governor Hull's Office, stated Governor Hull wanted to have her make a
statement of support for the Council's Chair and the Executive Director whom she opined
have been working very hard on the problems that have been identified.
Senator Grace moved that the Committee extend the Governor's Council on
Developmental Disabilities for a period of five years and to prepare a bill to
reflect this. The Motion CARRIED by voice vote.
Senator Day opined that the Council is making progress and noted that the Committee
took the Auditor General's report seriously. She wished the Council good luck
Without objection, the meeting was adjourned at 10:43 a.m.
Respectfully submitted,
~/~--r--J
Tracey Moulton, Committee Secretary
(Attachments and tape on file in the Secretary of the Senate's Office.)
2 Committees ofReference on the Governor's
Council on Developmental Disabilities
12/15/98
MEETING OF COMMI'ITEE ON
C-CJ>O)
Hearing Room No.--
Date: _
Time:-----
NAME REPRESENTING BILL NO.
r1J/f!.jlf J?I ~YJ17(JI!-~ 17UP/TO£- G6N~;<!A- L..
ffELeD bALD/AID v (01). COUNCiL 'DIV DEV DIS/fBI L/T7ES
~l~NVN r.. ri t t.""C G7f'J. ~ OV\.. '6, (:) (
7~]f/P,C) et 11lrnL£ ('nun(i/'I Memb,e;'Y--r'.--rfJDD
--rr<\t~.r~ ~L\ t\-k 2PA k h.r..l (' (h.\ \I"'\f' I t ~{\ C'\t::\ ~A.q'
~\t \-\ \J ,,", >-.\~ --
G()\J· G\(\<\r I( sd~~
--_..
(j 0
-- --- --- - - - --._- ._- .. _-- --- -
ARIZONA STATE LEGISLATURE
MEETING NOTICE
OPEN TO THE PUBLIC
SENATE HEALTH AND HOUSE HUMAN SERVICES
COMMITTEE OF REFERENCE
ON
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES 0
DATE:
TIME:
PLACE:
Tuesday, December 15, 1998
10:30 a.m.
Senate Appropriations Room 109
AGENDA
1. Call to Order - Opening Remarks
2. Public Testimony
3. Discussion
4. Committee Recommendation
5. Adjourn
MEMBERS:
Senator Ann Day
Cochair
Senator Sue Grace
Senator Randall Gnant
Senator Sandra D. Kennedy
Senator Elaine Richardson
12/4/98
JB/jas
RepresentativeFreddyHershberger
Cochair
Representative Barbara Left
Representative Mark Anderson
Representative Marion L. Pickens
Representative Rebecca Rios
Persons with a disability may request a reasonable acx:ommodation, such as a sign language interpreter, by contacting the Senate Secretary's
Office at (602) 542-4231 (voice). Requests should be made as early as possible to allow time to arrange the accommodation.
State of Arizona
office
of the
Auditor General
PERFORMANCE AUDIT
GOVERNOR'S
COUNCIL ON
DEVELOPMENTAL
DISABILITIES
Report to the Arizona Legislature
By Douglas R. Norton
Auditor General
September 1998
Report Number 98-18
DOUGLAS R. NORTON, CPA
AUDITOR GII!:NlEAAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
September 21, 1998
DEBRA K. DAVENPORT, CPA
DEPUTY A.UDITOR GENERAl.
Members of the Arizona Legislature
The Honorable Jane Dee Hull, Governor
Ms. Susan Madison, Executive Director
Governor's Council on Developmental Disabilities
Transmitted herewith is a report of the Auditor General, A Performance Audit of the
Governor's Council on Developmental Disabilities. This report is in response to a May
27, 1997, resolution of the Joint Legislative Audit Committee. The performance audit
was conducted as part of the Sunset review set forth in A.R.S. §§41-2951 through 41­2957.
The report addresses the Council's ability to effectively oversee the district councils it
contracts with to help plan and advocate on behalf of Arizona's developmentally
disabled citizens. The Council itself consists of 23 members appointed by the Governor
and is supported by a staff of six full-time employees; however, the Council's goals are
achieved primarily through annual contracts with six regional districts councils. As
specified in their contracts, these district councils serve their developmentally disabled
citizens by informing the Council about problems facing developmentally disabled
persons in their local communities, providing information regarding local service
providers and services offered, and referring developmentally disabled citizens and
their families to needed services. Historically, the district councils wrote their own
contracts and submitted them to the Council for approval. Consequently, the contracts
did not correspond directly with the Council's goals as specified in its State Plan.
Additionally, because Council staff did not sufficiently monitor district councils'
activities, some district councils had not been performing in accordance with their
contract requirements. However, to address these deficiencies and to provide an
increased emphasis on contract oversight, the Council's Executive Director has recently
implemented a new contract development and monitoring process. In addition to these
2910 NORTH 44TH STREET. SUITE 410 • PHOENIX. ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
September 21, 1998
Page -2-
efforts, the Council should also consider other methods of ensuring contract
requirements are met such as withholding district council funding when necessary,
developing outcome-based contracts, and implementing a competitive bidding process.
As outlined in its response, the Council agrees with all of the findings and
recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on September 22, 1998.
Sincerely,
~ ~~~
aOUglaS R. Norton
Auditor General
Enclosure
SUMMARY
The Office of the Auditor General has conducted a performance audit of the Governor's
Council on Developmental Disabilities (Council) in response to a May 27, 1997, resolution of
the Joint Legislative Audit Committee. This performance audit was conducted as part of the
Sunset review set forth in Arizona Revised Statutes (A.R.S.) §§41-2951 through 41-2957.
The Council's purpose is to plan and advocate on behalf of Arizona's estimated 83,000 de­velopmentally
disabled citizens to assist them in reaching their maximum potential. The
Council does this by monitoring current services for the developmentally disabled, identi­fying
unmet needs and gaps in services, and developing plans to address these needs. To
address the important issues facing Arizona's developmentally disabled citizens, the Coun­cil
develops a three-year State Plan. This plan is required under federal legislation and is
approved by the U. S. Department of Health and Human Services. Federal legislation also
requires that the Council operate independently of direct service providers, such as the De­partment
of Economic Security (DES). However, DES does provide the Council with ad­ministrative
services.
< The Council's current State Plan (1998-2000) identifies four important goals: Leader­ship/
Self-Determination (increasing self-sufficiency), Education, Employment, and Family
"Support. The Council implements these goals through annual contracts with-six regional
district councils, located in Scottsdale, Tucson, Prescott, Kingman, Apache Junction, and
Benson. The district councils provide local developmentally disabled citizens with advocacy
on important issues, information regarding service providers and services offered, and re­ferrals
to needed services.
~Governor's Council Should
'Continue Increased Emphasis
·on Contract Oversight
(See pages 5 through 11)
This performance audit found several problems that have historically impacted the Coun­cil's
ability to achieve its monitoring and advocacy goals for the developmentally disabled.
Contract oversight problems - The Council's limited oversight of the contracts it holds with
six district councils has impacted its ability to ensure all State Plan goals and objectives were
met in the past. Prior to 1998, the contracting process was problematic because the Council
relied on the district councils to develop their own contracts. This did not ensure district
councils were working on high-priority activities or that all Council goals and objectives
were collectively addressed. Further,~·the audit found that district councils were not per­forming
all of the work mandated by their contracts. For example, several district councils
1
made little or no progress in establishing family support groups or supporting leadership
development programs. Moreover, some district councils were also perfonning work under
non-Council contracts, which may have adversely affected the resources expended to
achieve Council goals.
Contract monitoring historically insufficient-The Council has also failed to adequately
monitor district council contract perfonnance to ensure compliance with contract require­ments
in the past. The Council requires the district councils to provide quarterly reports on
their activities. However, until recently the Council has not effectively used this information
to monitor contractually mandated activities and ensure goals are met at the local level. The
Council should continue its recent efforts to use infonnation obtained from district council
quarterly progress reports, have Council staff conduct regular site visits, and review inde­pendent
audit reports to monitor and assess contract performance.
"Other options- In addition to improved contracts and better monitoring, the Council has
other options to help ensure contract requirements are met. First, annually reviewing and
< revising district council cOIltracts to address deficiencies would help the Council ensure all
,,-State Plan goals and objectives are addressed. Additionally, the Council could withhold
district council funding for partial or complete nonperfonnance of contractual requirements.
Moreover, outcome-based contracts, which focus on specific impacts of district council ac­tivities,
such as the number of jobs developmentally disabled citizens obtained as a result of
district council efforts, could help the Council measure district council performance. Finally,
the Council could use a competitive bidding process to help ensure its goals are met. Cur­rently,
the Council issues sole source contracts to the district councils. The-Council could use
a"competitive bidding process, such as Requests for Proposal, to promote competition and
help ensure adequate perfonnance of contract requirements. Nine of 10 states surveyed
during the audit use competitive bidding.
11
Table of Contents
Page
Introduction and Background 1
Finding I: Governor's Council Should
Continue Increased Emphasis on
Contract Oversight 5
Contracts with District
Councils Primary Method
of Achieving Goals........................................................................................................... 5
Past Contract Oversight
Problems Hampered
Council Efforts to Ensure
Goals Were Achieved 6
Additional Changes Can
Help Ensure Contract
Requirements Are Met 9
Recommendations :........................................................................... 11
Sunset Factors.................................................................................... 13
Agency Response
Appendix a-i
iii
Table 1
Table 2
Table of Contents (concl'd)
Tables
Governor's Council on Developmental Disabilities
Statement of Revenues, Expenditures, and Operating Transfers
Years Ended June 30, 1996, 1997, and 1998
(Unaudited) .
Governor's Council on Developmental Disabilities
District Council Contracts
Year Ended September 30, 1996 .
IV
Page
4
a-i
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance audit of the Governor's
Council on Developmental Disabilities (Council) in response to a May 27, 1997, resolution of
the Joint Legislative Audit Committee. This performance audit was conducted as part of the
Sunset review set forth in Arizona Revised Statutes (A.R.S.) §§41-2951 through 41-2957.
Extent of Developmental
Disabilities in Arizona
According to the Council's three-year 1998-2000 State Plan, there are approximately 83,000
developmentally disabled people in Arizona. A.R.S. §41-2451 defines developmental dis­ability
as a severe, chronic disability of a person that:
• is attributable to mental or physical impairment such as mental retardation, cerebral
palsy, epilepsy, or autism.
• is manifested before age 18.
• is likely to continue indefinitely.
• results in substantial functional limitations in three or more of the following major life
areas: self-care, receptive and expressive language, learning, mobility, self-direction, ca­pacity
for independent living, and economic self-sufficiency.
• reflects the need for a combination and sequence of special services that are lifelong or of
extended duration.
The Council's Role
A.R.S. §41-2452 establishes the Council as Arizona's advocacy and planning body for per­sons
with developmental disabilities. The Council's statutory purpose is "to ensure that per­sons
with developmental disabilities receive the care necessary for them to reach their
maximum potential." The Council was established in 1978 under executive order as the Ari­zona
Developmental Disabilities Planning and Advocacy Council, and statutorily estab­lished
in 1983 as the Governor's Council on Developmental Disabilities.
The federal government plays a significant role in mandating Council activities and funding
them. The federal Developmental Disabilities Assistance and Bill of Rights Act of 1984 di-
1
rected federal monies to states to provide advocacy and plarming services to the develop­mentally
disabled. As such, the federal government mandated a separate entity other than
the state agency involved in coordinating and funding services to the developmentally dis­abled,
which in Arizona is the Department of Economic Security (DES). The Council serves
as Arizona's separate entity. As part of its federal mandate, the Council develops a three­year
State Plan that addresses federal goals and objectives.
The Council achieves most of its State Plan goals and objectives through contracts with six
district councils. These are separate not-for-profit entities that contract with the Council and
others to provide services to the developmentally disabled. The six district councils are lo­cated
in the same geographical areas as the six regional districts of DES' Division of Devel­opmental
Disabilities.
Organization
The Council is comprised of up to 23 members appointed by the Governor. By statute, the
members must represent people with developmental disabilities, parents and guardians of
people with developmental disabilities, and representatives from state agencies delivering
services to the developmentally disabled. The Council is organized into four standing com��mittees.
The Executive Committee oversees the budget and allocates project monies. The
Planning Committee coordinates Council efforts with other state agencies and evaluates the
feasibility of proposed projects. The Legislative Committee proposes, reviews, and monitors
legislative issues affecting Arizona's developmentally disabled citizens and their families.
The Monitoring and Evaluation Committee evaluates Council projects and contracts to en­sure
the Council's mission and goals are being met.
Six full-time staff support Council activities. Staff include an executive director, two plan­ners,
a program and project specialist, and two administrative staff.
Federal law requires the Council to be placed under the auspices of an administering agency
to assist the Council and its staff with administrative functions. The Council's administering
agency is the Department of Economic Security (DES). In this capacity, DES provides the
Council with administrative services such as accounting, contracting, and personnel serv­ices.
For these services, DES may receive up to 5 percent of the Council's total yearly budget
or $50,000, whichever is less. For fiscal year 1998, DES did not receive any compensation for
services performed on the Council's behalf.
Budget
The Council is entirely federally funded under the Developmental Disabilities Assistance
and Bill of Rights Act of 1984. Federal statute specifies certain Council expenditure alloca­tions.
At least 65 percent of Council monies must be allocated to develop and fund projects,
2
while no more than 35 percent can go toward administrative and planning activities. The
Council operates on a federal fiscal year (October 1 through September 30). Table 1 (see page
4) shows Council appropriations and expenditures for fiscal years 1995-96 through 1997-98.
Audit Scope and Methodology
The audit focused on the Council's contracts with six regional district councils and whether
more effective oversight of the Council's contracts and its district councils could help it bet­ter
achieve its mission. The report also includes the 12 factors that the Legislature should
consider in determining whether the Governor's Council on Developmental Disabilities
should be continued or terminated.
Auditors used several methods to review the issues presented in this report. They compared
federal legislation with the Council's three-year State Plan to determine if the Council is
meeting its federal requirements. Next, auditors compared the State Plan with the Council's
six district council contracts to determine if all State Plan goals and objectives are covered by
the contracts. Additionally, auditors reviewed district council quarterly reports to ascertain
if the district councils were adequately meeting their contract specifications. Auditors also
reviewed the district councils' independent audit reports and other non-Council contracts to
obtain an understanding of district council operations. Finally, auditors conducted a survey
of developmental disability council executive directors in ten other states to identify criteria
for improving the CounciP The states were selected based on their demographic similarity
to Arizona and their innovative work with developmental disabilities issues.
Key persons interviewed during this audit include the Council Executive Director and staff,
five Council members, the six district council directors, and representatives of five Arizona
advocacy organizations. In addition, auditors attended two full Council meetings and eight
Council standing committee meetings.
This audit was performed in accordance with government auditing standards.
The Auditor General and staff express appreciation to the Council, the Executive Director
and staff of the Council, district council directors and staff, and advocacy organization rep­resentatives
for their cooperation and assistance during the audit.
The ten other states contacted during the audit include California, Colorado, Hawaii, Iowa, Massachusetts,
Minnesota, Missouri, New Jersey, Oregon, and Utah.
3
2
Table 1
Governor's Council on Developmental Disabilities
Statement of Revenues, Expenditures, and Operating Transfers1
Years Ended June 30,1996,1997, and 1998
(Unaudited)
The Department of Economic Security accounts for the Council's financial transactions and activities, iden­tifying
them by a separate account code in the Department's General Fund. However, the Department does
not maintain fund balances at the activity level. Consequently, the Council's fund balance is not readily
determinable.
Represents the value of administrative services, such as accounting, contracting, and personnel services,
contributed by the Department to the Council.
Source: The Council's listing of revenues and the Department of Economic Security's Financial
Management Control System SUrll11uznj Trial Balance mj Fund report for the years ended
June 30,1996,1997, and 1998.
4
FINDING I
GOVERNOR'S COUNCIL SHOULD
CONTINUE INCREASED EMPHASIS ON
CONTRACT OVERSIGHT
The Governor's Council on Developmental Disabilities (Council) should continue its recent
efforts to improve its oversight of district council contracts. Although the Council contracts
with six regional district councils to implement its goals, the contracts have not adequately
specified Council objectives and have not been adequately monitored. However, under new
leadership, the Council has taken a more active role in overseeing its contracts. In addition
to these recent activities, the Council could implement several other changes that will help
ensure its goals are met and that Arizona's developmentally disabled citizens are ade­quately
served.
Contracts with District
Councils Primary Method
of Achieving Goals
The Council works to address important issues facing Arizona's developmentally disabled
citizens and their families. In doing so, the Council develops a three-year State Plan, which
is approved by the U.S. Department of Health and Human Services. Under the 1984 federal
Developmental Disabilities Assistance and Bill of Rights Act, state developmental disabili­ties
councils must promote two of four federal goals, including employment, in order to
receive federal funding for developmental disability advocacy and related activities. Over
the years, the Council has prepared several State Plans, which identify important issues
facing Arizona's developmentally disabled citizens. The current State Plan (federal fiscal
years 1998-2000) focuses the Council's efforts in four major goal areas: LeadershipjSelf­Determination,
which increases self-sufficiency for citizens with developmental disabilities;
Education, including access to related services such as assistive technology; Employment
opportunities and training; and Family Support, to help families of the developmentally
disabled.
The Council's goals are primarily achieved through annual contracts with six regional dis­trict
councils, which are located in Scottsdale, Tucson, Prescott, Kingman, Apache Junction,
and Benson. As specified in their Council contracts, these district councils serve their local
developmentally disabled citizens in several ways: providing advocacy, such as informing
the Council about problems facing developmentally disabled citizens in their local commu­nities;
providing infonnation regarding local service providers and services offered; and
referring developmentally disabled citizens and their families to needed services.
5
Past Contract Oversight Problems
Hampered Council Efforts to
Ensure Goals Were Achieved
Although the Council has recently identified the need for increased oversight, historically,
the Council has not adequately monitored district councils or their contracts to ensure that
all State Plan goals and objectives are met. The Council's prior contracting process did not
ensure all Council goals were addressed. Further, our review found that the district councils
are not performing all of the work specified in their contracts. In addition, district councils'
work involving non-Council contracts may impact the resources used to meet Council goals
and objectives. Finally, although the Council requires its district councils to report on their
activities, the Council has not historically used this information to track and ensure that
contractually mandated activities are performed.
Contracting process was problematic-Prior to the federal fiscal year 1999 contracting pe­riod,
the Council's contracting process created problems that impaired its ability to ensure
district council contracts addressed all Council goals. Historically, district councils wrote
their own contracts and submitted them to the Council for approval. This process was
problematic in that the district councils' contract objectives did not correspond directly with
the State Plan's goals, and Council staff did not review the contracts to ensure that the con­tractual
requirements were sufficient to address the Council's State Plan goals. The district
council contracts also varied in their format, which further complicated comparison of dis­trict
council contracts to Council goals.
To correct these problems, the Council Executive Director implemented a new process for
contracting with district councils for federal fiscal year 1999. The contracting process now
reflects a "top-down" approach in which the Council develops the contracts specifying
which goals the district councils are expected to address. District councils are now given a
scope of work, prior to contracting, which lists specific State Plan objectives to be achieved
during the contract year. Moreover, Council staff are now responsible for ensuring that all
district council contracts collectively address all Council goals and objectives contained in
the State Plan.
District councils not peifonning in accordance with contract requirements - While con­tracts
for federal fiscal year 1999 have been revised to more clearly specify what the Council
expects of the district councils, the Council has not ensured that its district councils are
achieving contract specifications. Auditors reviewed district council quarterly reports for the
current contract year and found that several district council quarterly progress reports either
did not address contract reporting requirements or showed little progress in performing
specific contract requirements. For example:
• All six district council contracts contain a Council Goal to "establish a family support
group through each district council to assess the implementation of Family Support."
6
However, three of the district councils are making little progress in initiating Family
Support group efforts or collaborating with other related entities, such as the Depart­ment
of Economic Security (DES) Division of Developmental Disabilities offices located
in the same regions as the district councils. Collaboration with other entities could pro­vide
increased information and resources to developmentally disabled citizens and their
families, which is the primary purpose of the Family Support goal.
• All six district council contracts contain a Council Goal to "increase participation of indi­viduals
with developmental disabilities and/or their family members in leadership de­velopment
programs." Four of the district councils made little or no progress during the
first six months of their current contracts, even though progress in this area could help
increase the self-sufficiency of developmentally disabled citizens.
Non-Council contracts could take resources awayfrom Council goal achievement-Several
district councils' work on non-Council contracts may have impacted the time and resources
expended to meet Council contractual goals. District councils are non-profit corporations
and may enter into non-Council contracts. During federal fiscal year 1996, four of the six
district councils had at least one non-Council contract. These contracts came from a variety
of sources, such as the Rehabilitative Services Administration of DES, Arizona Department
of Transportation, and Easter Seals. These contracts averaged 67 percent of the funding for
these district councils (see Appendix, page a-i).
The district councils' staff and resources used to fulfill these non-Council contracts can pres­ent
problems for the Council, especially if the work is performed using resources funded by
the Council. For example, one district council has a full-time director and secretary specified
in its Council contract. However, this district council director also works full-time under a
non-Council contract at the same time. As a result, Council-supported staff also administer
the non-Council activities, thus taking time and resources away from contractually man­dated
Council duties. Therefore, the Council should address whether district councils use
staff and resources paid for under Council contracts to perform non-Council contract work.
Monitoring of district council contract activities historically insufficient- Until recently,
the Council did not sufficiently monitor its district council activities. Although the Council
has several sources of useful information for determining the district councils' performance
of contract specifications, such as quarterly reports, site visits, and independent audit re­ports,
it did not fully use those monitoring tools in the past.
• Quarterly Reports - Historically, the Council and its staff have not used quarterly re­ports
to ensure that district councils are making adequate progress toward contract per­formance
and addressing the Council's goals and objectives. District councils are re­quired
to submit quarterly reports to Council staff, which document their progress in
meeting all contract requirements. As mentioned previously, auditors' review of the
7
quarterly reports revealed that several district councils had performed little or no activ­ity
on several of the goals. Timely and thorough review of the quarterly reports can pro­vide
the Council an assessment of progress-to-date on the goals. Thus, the Council staff
could then provide feedback and take other actions as needed to ensure that contract re­quirements
will be met.
The Council is beginning to address concerns with district council quarterly reports.
Until recently, the Council staff has never specified a standard reporting format for the
quarterly reports, which would facilitate comparison with contract specifications and
identification of inadequate district council performance. The Council Executive Director
recently assigned one staff person responsibility for monitoring district council quarterly
reports and comparing them with district council contracts to ensure contractual obli­gations
are met. District councils are now provided feedback regarding the adequacy of
their quarterly reports, including progress on Council goals.
• Site Visits - As was found in the 1988 audit, the Council members and staff have con­tinued
to encounter difficulty performing site visits of its district councils. Site visits can
provide the Council with important information on district council operations and help
the Council identify inadequate performance. However, the Council staff performed
only three site visits for the year ended September 30, 1996, and none in 1995. In addi­tion,
the Council staff had not specified a standard format or purpose for site visits. As a
result, some district council directors had questioned the purpose and usefulness of
these visits. To help rectify this situation, the Council staff has recently developed a
standard format for site visits, developed training for its Council members prior to their
making any future visits, and assigned one Council staff person oversight responsibility
for site visits. As of August 1998, the Council members and staff have performed site
visits of all six district councils.
• Independent Audit Reports - Prior to the hiring of the current Executive Director in
July 1997, it appears the Council did not review or question the findings of annual dis­trict
council independent audit reports, which are required under the Council contracts.
These audit reports contain important information, such as financial discrepancies, oper­ating
problems, and other work being performed by the district councils. They provide
the Council with valuable insight into district council operations and help the Council
make informed decisions regarding its contracts. In one case, it appears the Council and
its staff did not review or retain one district council's 1996 independent audit report.
This report noted approximately $6,500 in questionable expenditures, including $2,800
in undocumented travel expenses for the former director. However, the current Council
Executive Director has since reviewed the audit report and requested and received
documentation of the expenditures and reimbursement for approximately $2,800 in un­documented
expenses.
8
Additional Changes Can
Help Ensure Contract
Requirements Are Met
nJ
'-..-/
In addition to the Council's recent oversight activities, the Council should consider other
options to help ensure its contract requirements are met. First, district council contracts
should be annually reviewed, and revised as necessary, to ensure all Council goals are ad­dressed.
Second, funding could be withheld for partial or complete nonperformance of
contractual mandates. Third, using outcome-based contracts could help the Council meas­ure
district councils' performance and hold them accountable in the future. Finally, the
Council could use competitive bidding to promote competition and help ensure its goals are
met.
Contract review and revisions warranted- Better development of district council contracts
is necessary to ensure Council goals are addressed. The Council has contracted with the
district councils for several years. However, as noted previously, the prior contracting proc­ess,
which allowed district councils to write their own contracts with little involvement from
Council staff, contributed to incomplete and inconsistent contracts. Because contracts are
awarded annually and expire on September 30, the Council has the opportunity to annually
address contract deficiencies. Currently, the Council is developing new contracts for federal
fiscal year 1999 to ensure all facets of its State Plan that can be addressed by the district
councils are included.
Revision of district council contracts can also help ensure district councils fulfill Council
goals. The Council should determine if completion of its state plan goals satisfies contractual
requirements or if additional specifications regarding district council staffing are warranted.
If necessary, the Council can contractually specify the hours or percentage of district council
/~ _,staff time to be spent on Council contractual activities.
;' C).- ~oll1lcil could withhold district council funding- The Council could also withhold district
"'\ / / Icouncil funding to address performance problems. Each quarter, the Council prepays the
"-'~.// district councils one-fourth of the total funding specified in the contracts. As specified in its
contracts, the Council does have the option of withholding funding if some contractual re­quirements
are not met. In fact, the Council's new Executive Director recently withheld one ~<'b
,__district council's funding for complete nonperformance of contractual obligations. Although
( the district council lacked a director and did not operate for six months, the Council still t:'o~T
" \ paid the district council over $46,000 during this period. After reviewing the district coun- '\1./0-­"
y'v/ cil's quarterly reports and independent audit report, the new Council Executive Director ('.Ie, ')"'"
IS';'.. '>Iltt:t
,< withheld approximately $24,000 to reflect staff vacancies and related expenditures in the ('.. ~_". _''''
director's office during this six-month period. The Council Executive Director determined F·:'" .-'
\ that the remaining monies were appropriately spent on subcontractors who worked during (~.;</~:~-.~
this period. .
9
Although the above case illustrates an extreme example of district council nonperformance,
the Council had not previously withheld funding for merely substandard district council
performance either. In contrast, 4 of 10 states contacted during the audit have either with­held
funding or canceled contracts due to substandard performance.
Outcome-based contracts improve accountability - In addition to withholding funding for
inadequate performance, the Council should revise its district council contracts to be more
outcome oriented. Outcome-based contracts can help the Council better determine whether
its efforts are positively impacting Arizona's developmentally disabled citizens and help it
hold its district councils accountable for their performance. Even though the current con­tracts
specify district council activities, the contracts do not focus on the outcomes or overall
effect of their efforts. For example, one Council Employment Goal specifies that district
councils will "increase initiatives in transition and post secondary education to enhance em­ployment
opportunities." A more outcome-based objective would focus on the number of
jobs that developmentally disabled citizens obtain as a direct result of district council efforts.
The federal government is placing an increasing emphasis on outcome-based contracting
and accountability, according to the U.s. Department of Health and Human Services repre­sentative
who oversees state developmental disability councils. In addition, several state
developmental disabilities councils, such as California, Colorado, Iowa, Missouri, and Ore­gon,
have also moved to outcome-oriented contracting.
Competitive bidding could help ensure adequate peifonnance-Finally, competitive bidding
is available to the Council to help ensure its goals are met in the districts. Currently, the
Council issues sole source contracts to the district councils in each of the six districts. The
Council has been contracting with these same district councils for many years. Instead, the
Council may consider issuing Requests for Proposals (RFPs) to promote competition and
ensure adequate performance of its contracts. Comparatively, 9 of 10 states surveyed during
the audit use either an RFP-only contracting process or a combination of RFPs and sole
source contracts. An RFP process could allow the Council to contract with organizations
specializing in its goal areas. One organization could coordinate employment training and
entrepreneurship opportunities for developmentally disabled citizens statewide, which
could increase networking opportunities and facilitate the use of best practices learned from
local experiences.
10
Recommendations
The Governor's Council on Developmental Disabilities should continue its efforts to en­hance
contract monitoring by:
1. Reviewing its district council contracts to ensure that all Council goals and objectives are
addressed.
2. Holding its district councils to all contract specifications by continuing to:
a. Review and compare district council quarterly reports against contract specifi­cations;
b. Conduct regular site visits of its district councils; and
c. Review district council independent audit reports.
3. Continuing to withhold district council funding for nonperformance of contract specifi­cations.
4. Revising district council contracts to reflect more outcome-based performance measures.
5. Considering a Request for Proposal (RFP) process to ensure contract specifications are
effectively met.
11
(This Page Intentionally Left Blank)
12
SUNSET FACTORS
In accordance with A.R.5. §41-2954, the Legislature should consider the following 12 factors
in determining whether the Governor's Council on Developmental Disabilities (Council)
should be continued or terminated.
1. The objective and purpose in establishing the Council.
The Council is Arizona's advocacy and planning body for persons with develop­mental
disabilities. The Council consists of no more than 23 members appointed by
the Governor for three-year terms. The Council statute states that the purpose of the
Council is "to ensure that persons with developmental disabilities receive the care
necessary for them to reach their maximum potential." The Council addresses this
responsibility in the following ways:
• Identifying unmet needs for providing services to the developmentally disabled
through public input via Council meetings and district council feedback.
• Developing a three-year State Plan that establishes and prioritizes goals for ad­dressing
those issues or problems.
• Funding projects to meet goals outlined in its three-year State Plan.
In addition, A.R.S. §41-2454 lists the Council's duties, which include serving as a fo­rum
for issues concerning the developmentally disabled, advising private and public
officials on current programs and policies, reviewing Arizona's service plans, and
monitoring programs and services to the developmentally disabled population. The
Council also facilitates a statewide community information and advocacy network
through its contracts with six regional district councils. These district councils serve
as the Council's primary contact with developmentally disabled citizens and their
families at the local level. Under contract specifications, the district councils serve de­velopmentally
disabled citizens and their families by providing information on local
services and service providers; employment and rights training workshops; coordi­nation
with other agencies and organizations, such as the Department of Economic
Security; and advocacy for problems arising in their local communities.
13
2. The effectiveness with which the Council has met its objective and purpose
and the efficiency with which it has operated.
The Council can increase its effectiveness in meeting its mission and goals specified
in its State Plan through continued improvements in oversight of its district council
contracts. Although the Council contracts with six regional district councils to pro­vide
advocacy, information, and referral services to local developmentally disabled
citizens, the Council has not historically ensured that contracts, collectively, reflect all
of the Council's goals. Further, until recently, the Council has provided inadequate
oversight ot its contracts by not ensuring district councils perform all contractual
mandates. Although the Council has several useful sources of information, it has not
adequately used this information to evaluate district council performance in the past
(see Finding I, pages 5 through 11).
3. The extent to which the Council has operated within the public interest
Generally, the Council has operated within the public interest by assisting develop­mentally
disabled citizens and their families through promoting changes in the de­velopmental
disabilities service delivery system, advocacy, and increased independ­ence.
Specifically, the Council works toward four principal goals:
Self-Determination/Leadership Development- Providing increased independence
for individuals and their families through participation in self-advocacy training so
they have knowledge and control over their own lives.
Education - Providing advocacy for a free appropriate public education for all stu­dents
with disabilities, including adequate funding for related services. Provides
training in education advocacy and promotes a fair due process system and dispute
resolution when students are not receiving appropriate education and necessary re­lated
services.
Employment-Increasing opportunities for individuals to become employed
through changes in public policy and demonstration of an entrepreneurship project.
Family Support-Providing advocacy for increased implementation of family and
individual supports within the community and through grassroots involvement of
families in formal Family Support Groups.
Additionally, the Council has shown significant involvement in legislative advocacy,
and has funded projects to address unmet needs of developmentally disabled indi­viduals,
and co-sponsored or partnered many conferences pertaining to develop­mental
disability issues.
14
4. The extent to which rules adopted by the Council are consistent with the leg­islative
mandate.
According to the Governor's Regulatory Review Council, the Council does not have
rule-making authority.
5. The extent to which the Council has encouraged input from the public before
adopting its rules and the extent to which it has informed the public as to its
actions and their expected impact on the public.
Although the Council does not have rule-making authority, it is required to seek
public input on the three-year State Plan it sends to the federal government. The
Council has used various methods to seek input, including newsletters, public fo­rums,
and special meetings to inform the public and get input on Council priorities
and activities.
Finally, the Board has generally complied with the Open Meeting Law. However, the
Council's Executive Committee has violated the Open Meeting Law on two occa­sions.
In 1997, the Executive Committee held two conference calls to discuss funding
of its district council contracts. These meetings violated AR.S. §38-431.01(A) and (B)
by failing to provide public notice of the meeting times and places and by not re­taining
any documentation of the meetings or decisions reached.
6. The extent to which the Council has been able to investigate and resolve com­plaints
that are within its jurisdiction.
The Council's enabling statute does not establish a formal complaint investigation
and resolution process. However, according to the Executive Director, the Council
does handle concerns and complaints received from consumers and family mem­bers.
Since the investigation and resolution is most often handled with a few phone
calls, the Council does not formally track concerns and complaints it receives. More
in-depth situations require letters being sent or meetings with stakeholders. Addi­tionally,
most of its district councils also handle complaints through individual advo­cacy
calls, meetings, and training sessions.
7. The extent to which the attorney general or any other applicable agency of
state government has the authority to prosecute actions under the enabling
legislation.
This factor is not applicable to the Council.
15
8. The extent to which the Council has addressed deficiencies in its enabling
statutes which prevent it from fulfilling its statutory mandate.
The Council has sought technical and administrative changes to Board statutes over
the years. However, the most recent legislation was passed in 1986, which increased
the number of council members from 17 to no more than 23.
9. The extent to which changes are necessary in the laws of the Council to ade­quately
comply with the factors listed in this subsection.
Based on our audit work, no statutory changes related to the Council's laws are rec­ommended.
10. The extent to which the termination of the Council would significantly harm the
pUblic health, safety or welfare.
Termination of the Council would not significantly harm the health, safety, or wel­fare
of the State's developmentally disabled population. However, if the Council
were terminated, Arizona's developmentally disabled citizens would lose a resource
that serves as a statewide advocate and funds projects to identify and meet the needs
of the developmentally disabled community. In addition, Arizona must have a
Council, independent of service providers such as the Department of Economic Se­curity,
to receive its allotted share of federal money, which amounted to approxi­mately
$853,000 for fiscal year 1998, according to Council estimates.
11. The extent to which the level of regulation exercised by the Council is appro­priate
and whether less or more stringent levels of regulation would be appro­priate.
Since the Council is not a regulatory body, this factor does not apply.
12. The extent to which the Council has used private contractors in the perform­ance
of its duties and how effective use of private contractors could be ac­complished.
The Council relies on private contractors to assist in performing several important
duties. For example, the Council funds the six nonprofit district councils to assist it in
achieving its goals for persons with developmental disabilities. Additionally, it gives
the Arizona Center for Disability Law funding to provide statewide legal advocacy
services to the developmentally disabled. Periodically, the Council also funds other
private contractors for a variety of services.
16
--
Agency Response
(This Page Intentionally Left Blank)
'I Governor's Council
on Developmental Disabilities
Jane Dee Hull
Governor
Helen Baldino, Esq.
Council Chairperson
Susan Madison
Executive Director
September 14, -1998
Mr. Douglas Norton
Office of the Auditor General
2910 N. 44th St., Suite 410
Phoenix, AZ 85018
Dear Mr. Norton:
1717 West Jefferson (SC074Z)
Phoenix, AZ 85007
Telephone (602) 542-4049
FAX (602) 542-5320
1-800-889-5893
The Governor's Council on Developmental Disabilities has reviewed
the revised draft report from your office. The Governor's Council
wishes to thank all audit staff for reflecting changes discussed
during the August 26, 1998 meeting.
The Governor's Council on Developmental Disabilities will continue
its efforts to enhance contract monitoring. From the report, the
following recommendations follow:
1. The Council will review its District Council contracts to
ensure all Council goals and objectives are addressed.
The finding of the Auditor General is agreed to and the audit /
recommendatlon will be implemented.
2. Holding its District Councils to all contract specifications
by continuing to:
a} Review and compare District Council quarterly reports
against contract specifications
b} Conduct regular site visits of its District Councils; and
c} Review District Council independent audit reports.
The finding of the Auditor General is agreed to and the audit /
recommendations will be implemented.
3. Continuing to withhold District Council funding for non­performance
of contract specifications.
The finding of the Auditor General is agreed to and the audit J
recommendation will continue to be implemented.
Page 2
Norton Letter
4. Revising District Council contracts to reflect more outcome­based
performance measures.
The finding of the Auditor General is agreed to and the audit /
recommendation will be implemented. v
5. Considering a Request for Proposal (RFP) process to ensure
contract 'specifications are effectively met.
The finding of the Auditor General is agreed to and the audit /
recommendation will be implemented. vf
The Governor's Council members and staff again wishes to thank the
Auditor General's Office staff for their professional and thorough
job during the performance audit. The audit team was receptive and
kept staff well informed during the various stages of the audit.
Sincerely,
dt4t/hfi Dltdnb
Helen Baldino
Chairperson
~L/0/~,,~
Susan Madisoh­Executive
Director
(This Page Intentionally Left Blank)
Appendix
Table 2
Governor's Council on Developmental Disabilities
District Council Contracts
Year Ended September 30, 1996
Governor's District Other
Council Other Council Total Contracts as
District Contract Contract Contract Percentage Source of
Councils Amounts Amounts Amounts of Total Other Contracts
1 $ 78,977 $208,116 $ 287,093 72% AZ Early Intervention Program
(DES)
2 115,573 115,573 NjA
3 83,095 86,509 169,604 51 Rural Public Transportation
(ADOT) and Easter Seals Project
ACTION
4 83,349 284,963 368,312 77 Community Development
Grant and Interagency Co-ordinating
Council
5 62,415 46,720 109,135 43 Rehabilitative Services Admini-stration
(DES)
6 69,018 69,018 NjA
Total amounts $492.427 $626,308 $1.118,735
Total other contract amounts as a percentage of the total
contract amounts for Districts 1, 3, 4, and 5 67%
Source: Auditor General staff analysis of district council contracts for the year ended September 30, 1996.
a-I