Tag Archive for 'Audits'

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

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: 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.

Secretary of State Kate Brown releases audit recommendations for jobs and business expansion at Vigor Industrial in Portland

Published on June 12, 2012 in Audits and Secretary Brown. 0 Comments Tags: , , , , , , , , , .

PRESS ADVISORY
June 11, 2012

Media Contact:
Andrea Cantu-Schomus, 503-986-2368

(Salem, OR) – On Wednesday, June 13, Secretary of State Kate Brown will release an audit of Oregon’s Workforce Development. Auditors found Oregon could be doing a better job of matching middle-skilled training programs at Oregon’s Community Colleges and the many other workforce development programs with current and projected job demand.

“We need a more strategic, coordinated, statewide plan that identifies high demand jobs or industries with a projected under-supply and offer training to get these Oregonians to work,” said Secretary Brown. “We need more partnerships like Vigor Industrial and Portland Community College where men and women in search of a career can get the training they need to get hired right out of school.”

Secretary Brown will tour Vigor Industrial’s Swan Island Training Facility with PCC President, Dr. Preston Pulliams and representatives from Vigor Industrial. On the grounds of the Portland shipyard, this joint venture provides welding training opportunities that support workforce development for Vigor Industrial and other area companies.

Vigor Industrial/PCC Swan Island Training Facility
10:00 AM
5555 N. Channel Ave
Portland, Oregon 97217

The entrance to the training center is off Lagoon Avenue.

Secretary of State reports on financial condition of Oregon’s counties

Published on May 31, 2012 in Audits, Press Releases, Secretary Brown and Uncategorized. 0 Comments Tags: , , , , , , .

Press Release
May 30, 2012

Salem – The Secretary of State Audits Division produced the first ever financial condition review of all 36 of Oregon’s counties, and suggested eight that should be monitored, based upon 10 financial, economic, and demographic indicators.

Auditors analyzed the financial statements and other data from all 36 counties to identify financial concerns, and then conducted more in-depth analysis of those counties that may be at a higher risk of distress. Federal forest payments, due to run out, had the largest impact on their assessments. Not surprisingly, the eight counties identified by the auditors are Coos, Curry, Douglas, Jackson, Josephine, Klamath, Lane, and Polk. The auditors also obtained information from these counties on steps they have taken to address their financial situation.

“This is the first time that an independent review has been conducted of the financial health of our counties using a common set of economic indicators,” said Secretary of State Kate Brown. “This report establishes a baseline for state and local policymakers to monitor the financial condition of our counties, which are important partners with the state in the delivery of services. We will update this report every two years to track the improvements or declines.”

The report does not contain recommendations to the counties, noting that decisions about county taxes and levels of service are based upon local priorities. Nonetheless, the report compiled the laws, strategies, and actions used by other states in dealing with local governments in financial distress.

“Each county’s situation is different and there is no single solution,” said Brown. “This report is an important step in government transparency and accountability, making it clear how our counties are holding up under the loss of federal timber dollars and the recession.”

Auditors compared indicators among counties such as timber revenue dependence, debt burden, retirement benefit obligation, public safety spending, personal income per capita, population trends, and unemployment.

The report 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

Audit Recommends Ways to Ensure Children Receive Needed Mental Health Treatment

Published on May 23, 2012 in Audits, Press Releases, Secretary Brown and Uncategorized. 0 Comments Tags: , , , , , , .

Press Release
May 23, 2012

Better documentation, tracking, and continuity of services is needed

SALEM – An audit by the Secretary of State’s Audits Division identifies several ways the state could better ensure children on the Oregon Health Plan are able to access and continue with needed mental health services. This comes at a time when Oregon’s health care is undergoing a major transformation. The state is beginning to contract with newly formed Community Care Organizations to deliver integrated physical and mental health care, through networks of service providers.

“Oregon is leading the nation with a revolutionary health care transformation that focuses on overall health and prevention,” said Secretary of State Kate Brown. “As an important first step the state has made sure as many eligible Oregon children are on the Oregon Health Plan as possible through Healthy Kids. This audit goes one step further by offering valuable recommendations on how mental health services under the plan can improve so more Oregon kids can remain healthy, in school and at home with friends and family.”

Auditors found unplanned service breaks often occurred during transitions from one type of mental health service or provider to another. For example, some children completing treatment in a residential care facility had lengthy unplanned breaks before outpatient treatment began. Case files sometimes lacked explanations for service breaks and efforts to re-engage the child in mental health services.

In addition, auditors suggested that the state should focus on service timeliness, providing explanations in case files for lengthy service breaks, tracking and analyzing service breaks, and ensuring providers make adequate efforts to re-engage children when unplanned service breaks occur.

Better tracking of demographics could also be useful to ensure maximum access. For example, Hispanic children comprise 30 percent of the children in managed care however, only 3 to 4 percent are receiving mental health services. The rates of young girls and young children accessing services are also low. It is important for the state to provide close monitoring to ensure that low utilization rates among populations are a result of lower mental health needs rather than a weakness in outreach efforts or diagnoses.

National studies estimate that about one in five children nationally has a diagnosable mental health disorder and one in ten children have mental health challenges that negatively impact their ability to function in their environment.

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