Archive for the 'Audits' Category

Audit Recommends Changes to Public Assistance System

Published on May 8, 2013 in Audits, Press Releases and Secretary Brown. 0 Comments Tags: , , , .

Agencies agree to make changes to improve eligibility criteria and monitoring

SALEM — Secretary of State Kate Brown today released a new audit that recommends Oregon consider changes to the eligibility criteria used in public assistance programs to ensure that these important programs serve those Oregonians most in need.

“Public assistance has helped struggling families through the worst economic recession in generations by making sure they have food and health care,” said Secretary of State Brown. “It is critically important to maintain public faith in the integrity of the system and to continue to help struggling Oregon families.”

Secretary Brown commended the Oregon Health Authority and the Department of Human Services for agreeing to make certain changes, including seeking federal waivers to allow the agencies to take into consideration lottery winnings and lump sum retirement pay-outs.

A video clip of Secretary Brown is in available online. An audio clip of Secretary Brown is  also available online. To download, right-click and choose “save as” to download file.

The purpose of the audit was to compare public assistance records with various other data sets to identify potentially ineligible recipients and recommend ways to prevent improper payments. We found recipient matches among:

  • Social Security Administration (SSA) death records;
  • Oregon lottery winners;
  • State prisoners;
  • Public Employees Retirement System (PERS) retirees;
  • Department of Human Services (DHS) and Oregon Health Authority (OHA) employees.

During our review of these matches, we identified some ineligible recipients and improper payments, but we also learned that many individuals were allowed benefits under Oregon’s expansive eligibility criteria.

We recommend Oregon consider changes to client eligibility and reporting requirements in state public assistance programs, balancing accessibility for the neediest with the most prudent use of public resources. We also recommend DHS and OHA improve Social Security Number verification policies and procedures, continue reviewing data matches we provided to them, and enhance efforts to recover any overpayments through collection efforts.

A copy of the audit is available online.

The audit team consisted of Deputy Director William K. Garber, MPA, CGFM; Audit Manager Sandra K. Hilton, CPA; Principal Auditor Jamie N. Ralls, CFE, ACDA; Senior Auditor Kyle A. Rossi; Staff Auditor Michelle A. Short; and Staff Auditor Clint J. Fella, MBA, CFE.

For more information, contact:

Tony Green
Director of Communications
Oregon Secretary of State
503-507-0082
tony.green@state.or.us

Audit Recommends Greater Accountability at Oregon University System

Published on April 10, 2013 in Audits, Press Releases and Secretary Brown. 0 Comments Tags: , , , , , .

Tuition, student debt and faculty workload all need better tracking

Secretary of State Kate Brown today released a performance audit that recommends significant changes to increase accountability in the Oregon University System and its seven universities.

Oregon leaders agree that a college education is a key to the state’s future and are working to strengthen the Oregon University System. The audit report found several areas that can help accomplish the shared goal of a university system that meets the needs of Oregon students.

“We need to know how much it costs to educate an Oregon university student,” said Secretary of State Kate Brown. “We need greater accountability. Improving our higher education system is critical to Oregon’s economic growth.”

This performance audit is available online.

Listen to an audio statement by Secretary Brown. (Right-click and choose “Save link as” to download audio.)

The audit highlights several areas to address, including:

Governance. Oregon’s current structure risks creating confusion and a lack of accountability. Governance and authority over higher education needs to be clarified.

Tuition and Fees. Residential tuition and fees increased faster than inflation and increased more than the loss of state funding between 2001 and 2012. Despite increased tuition rates and higher spending by universities, educational spending per student has declined. OUS’s current financial tracking and reporting makes it difficult to understand how many resources are devoted to educational activities. Better tracking of education spending is needed.

Student Debt. Student debt for OUS graduates was on average 9% higher than the national average for the classes of 2005 to 2010. In addition, the heaviest cost burden falls on those with the lowest incomes. However, OUS does not report on the 35% of students who fail to graduate with a bachelor’s degree within six years or started at another institution. OUS should determine and track the unmet need and debt for all students and align programs to provide access and reduce student debt for those most in need.

Research Costs. Tenured and tenure-track faculty at OSU, PSU, and UO are expected to conduct research and non-sponsored costs are absorbed within the department budget. Universities do not track the amount of time that faculty spend on research, teaching, advising, or other duties. OUS and its research universities should account for all research related costs.

Financial Accountability. Oregon universities have taken some steps to control costs but the efforts and results are varied. Budget reports and analyses are not presented to decision-makers in a way that aids evaluation and financial management. OUS universities need to track, report, and evaluate costs across all levels of higher education in order to prioritize spending and improve financial decision making.

Personnel Costs. Personnel costs (salary and benefits) are OUS’s largest expenditure. The Chancellor’s Office cannot analyze actual personnel cost trends in detail without working closely with individual universities. OUS cannot control most of the costs related to health and retirement, which are driven by PERS and the state. However, OUS can control personnel costs in terms of the number and type of employees as well as their job functions. OUS and its universities should closely monitor and routinely report on all personnel costs.

Costs and Enrollment. OUS universities are relying on increased enrollment to help balance their budgets, especially from non-resident students. However, OUS universities do not know the full cost of increasing enrollment. OUS universities calculate the average cost to educate a student; however, they do not include costs associated with increased capacity, such as debt service or capital construction. In addition, admittance of non-resident students has increased while admittance of resident students has slowed and in some cases decreased. OUS and its universities should create a comprehensive enrollment and financial management strategy.

Graduation Rate. Oregon universities admit applicants that are less prepared for college and less likely to graduate. Performance metrics do not represent the entire student body. For those it tracks, OUS has steadily improved the number of degrees granted each year. Apart from the University of Oregon and Oregon State University, the 6-year OUS graduation rate is below the national average for similar institutions. Oregon is less likely to achieve its 40-40-20 educational goal if OUS universities do not increase graduation rates. OUS needs to better assess the effectiveness of student assistance programs and report performance metrics for all students.

Media Contact:

Tony Green   (503) 507-0082   |   tony.green@state.or.us

Sec of State Kate Brown Releases State of Oregon Financial Condition Report

Published on March 13, 2013 in Audits, Press Releases and Uncategorized. 0 Comments Tags: , , , , , .

Report presents mixed financial picture

An analysis of state finances presents a mixed picture, with unemployment dropping and personal income increasing but the number of Oregonians living in poverty on the rise and spending on K-12 education and transportation declining sharply.

“These have been trying times for Oregonians, but we should be proud of the tough decisions the Legislature has made to shore up state finances during the Great Recession,” said Secretary of State Kate Brown.

Read the Financial Condition Report.

Listen to an audio statement by Secretary Brown. (Right-click and choose “Save link as” to download audio.)

The State of Oregon Financial Condition Report is released biennially by the Secretary of State’s Audits Division. It covers the 10-year period from fiscal year 2003 through 2012.

Favorable trends include:

  • Oregon’s unemployment rate continues to drop, hitting 8.4% in November 2012, down from a high of 11.6% in 2009.
  • Per capital income is increasing although it still falls short of pre-recession levels.
  • Unlike many states, Oregon had sufficient reserves to avoid borrowing money to cover unemployment benefits during the recession.
  • The state’s outstanding debt as of June 30, 2012 declined slightly, reversing a decade-long trend.
  • State finances were buoyed by a new requirement that state employees begin contributing to their health care insurance.

Unfavorable trends include:

  • The number of Oregonians living in poverty continued to increase.
  • Spending on K-12 education and transportation declined sharply in recent years.
  • Investment losses caused by the recession require sharp increases in government contributions to the Public Employee Retirement System (PERS).
  • The state’s Rainy Day fund is nearly depleted.

The purpose of this report is to provide lawmakers and the public with information to understand Oregon’s financial condition and make important decisions about the state’s future.

 

Audit Proposes Improvements to Provide Greater Accuracy and Transparency in State Agency Budget Forecasting

Published on February 8, 2013 in Audits, Press Releases, Secretary Brown and Uncategorized. 1 Comment Tags: , , , , , .

FOR IMMEDIATE RELEASE
February 8, 2013

The audit was first requested by Sen. Richard Devlin.

SALEM – Increased independence could improve the confidence of client caseload forecasting that is the basis for two of the largest state agency budgets in Oregon, according to an audit released today.

“Legislators need accurate information to put together the state budget,” said Secretary of State Kate Brown. “The audit released today is an excellent example of this office working with the Legislature to improve the integrity of the budgeting process.”

The Office of Forecasting, Research, and Analysis is a shared service of the Department of Human Services (DHS) and the Oregon Health Authority (OHA). The unit’s client caseload forecasts are used to estimate expenditures for the two agencies’ budgets.

Accurate forecasting is critical to the budgeting process. Over-forecasting means less money for legislative priorities in the initially adopted budget. Under-forecasting results in a shortfall.

The audit determined that the forecasting unit has generally been accurate and getting better in recent years. Auditors found one instance in which senior management influenced the client caseload estimate for the Aid to the Blind and Disabled program, resulting in approximately $4 million more than the program needed. Since the Spring 2011 forecast, DHS and OHA have taken steps to address independence concerns. However, the current governance and oversight structures may not sufficiently protect the unit’s independence.

As part of the normal budget monitoring process, the Legislative Emergency Board learned of the over-allocation in 2012, and re-allocated the money, mostly to other OHA programs. General concerns regarding the independence and accuracy of forecasting prompted Sen. Richard Devlin to request this audit. Dr. Bruce Goldberg, Director of the Oregon Health Authority, and Michael Jordan, State of Oregon Chief Operating Officer, later requested the audit as well.

“Overall, client forecasting for OHA and DHS have been good and getting better,” said Audits Director Gary Blackmer. “We recommend some safeguards to consider to increase confidence in the forecasting.”

The audit makes recommendations to improve the unit’s transparency and the independence of its forecasting. One alternative is to create a policy oversight committee for the unit. Another alternative is to place the forecasting unit under the administrative oversight of an external agency. The Legislature made a similar move several years ago when it transferred prison inmate forecasting from the Department of Corrections to the Office of Economic Analysis.

“The integrity of the budget process is critical to making sure Oregon’s tax dollars reflect the priorities of the Legislature and the Governor,” said Sen. Richard Devlin. “I appreciate Secretary of State Brown’s quick responsiveness to concerns that I raised.”

The audit was conducted by William K. Garber, CGFM, MPA, Deputy Director; Sandra K. Hilton, CPA, Audit Manager; Shanda L. Miller, CIA, MPA, Principal Auditor; and Ian M. Green, MS, Staff Auditor.

The audit report, including the agency response, can be found at www.sos.state.or.us/audits.

The Audits Division of the Secretary of State’s office promotes the wise use of tax dollars, sound management and government accountability.

For more information, contact:

Tony Green
Director of Communications
Oregon Secretary of State
503-507-0082
tony.green@state.or.us

Audit Finds Opportunities to Increase Adult GEDs

Published on February 6, 2013 in Audits, Press Releases, Secretary Brown and Uncategorized. 0 Comments Tags: , , .

Press Release
February 6, 2013

SALEM – An audit released today recommends opportunities to increase the number of adults who earn General Education Development (GED) credentials to help achieve the state’s goal of ensuring that all adult Oregonians earn at least a high school diploma or equivalent by 2025.

“The GED certification provides adults the chance to be more competitive in Oregon’s changing workforce and to continue on to higher education,” said Secretary of State Kate Brown. “It is critical that we do all that we can to assist Oregonians in obtaining the education they need to thrive in today’s economy.”

Making Oregon more competitive in an increasingly service- and information-based economy led business leaders and policymakers to institute a statewide educational goal that emphasizes preparing students to succeed in post-secondary education. In 2011, the Oregon Legislative Assembly set the following goals to be achieved by 2025:

  • At least 40% of adult Oregonians have earned a bachelor’s degree or higher.
  • At least 40% of adult Oregonians have earned an associate’s degree or post-secondary credential as their highest level of educational attainment.
  • The remaining 20% of all adult Oregonians have earned a high school diploma, an extended or modified high school diploma, or the equivalent of a high school diploma as their highest level of education attainment.

Census numbers show that Oregonians without a high school diploma or equivalent have an unemployment rate of 15.6%, well more than double the 6.3% rate of Oregonians with a bachelor’s degree or greater. Auditors found that current strategies aimed at implementing Oregon’s 40-40-20 education goal do not sufficiently address the needs of the nearly 340,000 adult Oregonians who are currently without a high school diploma or equivalent. High schools do not routinely share with Oregon’s 17 community colleges or other organizations any information about students who recently dropped out. With this information, community colleges could attempt to contact former students about GED preparatory programs and the exam. Instead, many community colleges largely rely on traditional marketing and outreach efforts such as distributing flyers or including GED class information in course catalogs and college websites. There also is little statewide marketing effort to publicize the value of adults obtaining a GED credential.

Additional marketing and outreach practices could increase public awareness about the value of a GED.

In addition, better collaboration with other agencies and organizations can help ensure clients needing a GED credential are referred to local programs. Auditors also noted that funding to community colleges for GED preparation has been curtailed in recent years.

“We see the valuable role that community colleges play in helping adults obtain a GED,” said Gary Blackmer, the Oregon Audits Division Director. “We also found a number of strategies that could address this gap in our education system.”

The report can be found at www.sos.state.or.us/audits.

The audit team included William Garber, CGFM, MPA, Deputy Director; Sheronne Blasi, MPA, Audit Manager; and Nicole Pexton, MPP, Staff Auditor.

The Audits Division of the Oregon Secretary of State’s office promotes the wise use of tax dollars, sound management and government accountability.

For more information, contact

Tony Green, Director of Communications
Oregon Secretary of State
503-507-0082
tony.green@state.or.us

Missing equipment and questionable purchases in Mt. Hood Community College’s wilderness program

Published on October 29, 2012 in Audits and Press Releases. 0 Comments Tags: , , , , .

SALEM – A Secretary of State investigation of Mt. Hood Community College’s (MHCC) wilderness leadership program inventory identified missing equipment and questionable reimbursements. MHCC had already initiated an internal investigation, but asked the Secretary of State’s Audits Division for assistance.

Using MHCC purchase records, auditors identified about $13,000 in equipment that was missing from campus.  Among those missing purchases, about $1,500 appeared to match personal gear requested by students. However, the college did not receive reimbursement for personal gear purchases even though emails indicated some students may have directly reimbursed instructors.

Auditors also noted instances of travel and purchase reimbursements that were in excess of the per diem rate, appeared contrary to policies, lacked sufficient detail, gave personal rewards benefits that may violate state policies, and paid instructors for purchases paid by a MHCC credit card. Secretary Brown has also submitted the report to the Oregon Government Ethics Commission for possible ethics violations.

“I appreciate the college’s cooperation with this investigation. Everyone involved cares very much about accounting for every taxpayer dollar,” said Secretary of State Kate Brown. “With these recommendations implemented and strong oversight by college administration, we expect this won’t happen again.”

In addition to issues in the one program, there were allegations about faculty or administrative staff complaints not being handled timely.  Auditors noted college personnel had been addressing complaints though could improve its tracking of complaints and actions taken on those complaints.

Auditors recommended MHCC develop or update policies over inventory, purchase card use, travel reimbursement, and grant reimbursements. In addition, auditors recommend maintaining a central listing of faculty and staff complaints and the actions taken.

The report, including the agency response, can be found at www.sos.state.or.us/audits.

If you know of or suspect any fraud, waste, or abuse affecting state funds or resources, call 1-800-336-8218. Professional operators are available 24 hours a day, 7 days a week. Or report online at http://fraud.oregon.gov . Any person reporting such acts shall remain anonymous.

Audit Provides Strategies to Accelerate Certification Helping Women and Minority Owned Businesses Get up and Running

Published on September 11, 2012 in Audits, Press Releases, Secretary Brown and Uncategorized. 0 Comments Tags: , , , , .

Press Release

9/11/2012

SALEM – A new state audit of Oregon’s Office of Minority, Women and Emerging Small Business (OMWESB) recommends several improvements to make the certification process faster and more consistent for its applicants. The audit also addresses the challenges of a small staff with a high workload.

As of May 1, 2012, there was a backlog of 371 business applications for approximately 460 state business certifications, with only three certification specialists to handle them. The audit found that the steps for processing applications could be improved to reduce the variance in the timeliness of certifications and some inconsistencies in staff decisions.

“OMWESB certification opens the door to so many opportunities for these small businesses,” said Secretary of State Kate Brown. “That’s why it is so important that we provide strategies to improve the process of certification that in turn helps these businesses get up and running putting Oregonians back to work.”

Among its recommendations, the audit called for management to evaluate the necessity and priority of its tasks, review its work balancing and work flows, develop and update policies and procedures, simplify its application forms, and develop and use performance information to improve certification efforts.

The report, including the agency response, can be found at www.sos.state.or.us/audits.

 

 

Audit: Computer Controls at Oregon Employment Need Attention

Published on August 15, 2012 in Audits and Press Releases. 0 Comments Tags: , , , , .

Better collection of unemployment overpayments needed

The Secretary of State Audits Division released a report today that found Oregon Employment Department computer systems reasonably ensured accurate and timely payment of unemployment benefit, but the department could improve handling of unusual or complicated claims.

For example, auditors found about $23 million of identified overpayments, about one percent of total payments, were not processed for more than six months, delaying collection efforts. In addition, auditors identified $6 million of overpayments that likely would never be assigned for collection. The department also handled some overpayments by paying claims again without considering the amount that was already overpaid, increasing overpayment totals for these claims from about $4.1 million to $9.6 million.

“During this great recession, unemployment benefits have been a lifeline to so many Oregonians. Still, it’s important for the Employment Department to minimize overpayments and to set up sound procedures for collecting that money to protect taxpayers and businesses,” Secretary of State Kate Brown said.

Auditors also noted improvements the department could make to better manage changes to computer code, define how the system would be recovered in the event of a disaster, and improve security over the system and its data.

The report, including the agency response, can be found at www.sos.state.or.us/audits.

Audit Finds Prison Staffing is Generally Well Managed

Published on July 26, 2012 in Audits, Press Releases, Secretary Brown and Uncategorized. 0 Comments Tags: , , , , , , .

Department of Corrections scheduling and overtime minimizes state costs

The Secretary of State Audits Division released a report today that found overtime and personnel costs at two state prisons were generally well managed. The Oregon Department of Corrections (DOC) spent about $540 million during the 2009-2011 biennium for security personnel who directly supervise offenders. The 30-page audit analyzed security personnel costs at Coffee Creek Correctional Facility and Two Rivers Correctional Institution, considering payroll, budgeting, staffing, scheduling, and accounting functions.

Auditors noted some areas where improvements may be possible, but did not identify substantial savings or inefficiencies in the management of overtime or personnel costs at the two correctional facilities.

“The Department of Corrections has done a good job of containing the costs to run these two prisons,” said Secretary of State Kate Brown. “The auditors went through several years of scheduling decisions with special attention to all the places where savings might be found.”

Auditors analyzed past payroll data to assess facility staffing and concluded the approved staffing factor was reasonable. Auditors also noted that furloughs may not achieve savings in a correctional environment and add administrative burdens. The audit also illustrates how overtime can reduce costs, if used effectively, since the cost of maintaining a higher overall staffing level can be more expensive than inconsistent overtime.

The report, including the agency response, can be found at www.sos.state.or.us/audits.

For more information, please contact

Andrea Cantu-Schomus
Communications Director
Oregon Secretary of State
503-986-2368
503-507-0082

Secretary of State Makes Recommendations to Better Manage Oregon’s 250+ Boards and Commissions

Published on June 27, 2012 in Audits, Press Releases and Secretary Brown. 0 Comments Tags: , , , , , , , .

SALEM – A state audit released today found Oregon lacks a clear and comprehensive structure for creating and managing its boards and commissions (boards). The report highlights some common risk factors faced by many boards and identifies opportunities to improve the governance and operations of boards to promote accountability and transparency.

“Boards play an important role in Oregon’s government,” says Secretary of State Kate Brown. “However, it is not always clear how these boards and their members are to be held accountable for fulfilling their missions and using state resources.”

Currently there are over 250 boards and most of the board members are appointed by the Governor. Accountability for the performance of those members and the boards they participate on can be improved and common risks can be addressed through clear management structures and appropriate training and oversight.

It is important for board members to understand their role in creating and upholding the agency’s system of internal controls. Without adequate controls and board oversight there is greater risk of theft, misappropriation, noncompliance and underperformance problems.

“I urge the Governor and the Legislature to closely review the recommendations and work together to better manage the activities and outcomes of all Oregon’s boards and commissions,” said Kate Brown. “These public entities can provide an important service to government, but must be properly managed.”

Auditors recommended the Governor expand training of board members, specifically in the areas of state rules and internal controls; improve oversight of and by board members, including handling complaints; and consider other states’ strategies and past efforts in Oregon to manage the creation and elimination of boards.

The report can be found at www.sos.state.or.us/audits.