Tuesday, March 15, 2005 | 11:07 a.m.
CARSON CITY -- Several state audits released Monday pointed to ways that the state could be saving millions of taxpayer dollars annually while better serving the public.
One executive audit, for example, noted that construction of state projects take longer to complete than they should and wind up costing more when they shouldn't. The audit recommended that the Nevada Public Works Board exercise tighter controls of the private contractors.
The state Division of Internal Audit released a report Monday that said it reviewed four projects that took an average of 43 months to complete. It said the staff of the public works board had estimated the work should have been done in 30 months.
"Additionally, we surveyed the public works staff of Washington, Oregon and Utah," said the division. "They estimated comparable projects would only have taken them an average of 24-30 months to complete."
The public works board oversees the state's construction program. The audit recommended the board set an estimated date for completion when the project is started and then require intermediate milestone dates for the contractor to meet. "This could help identify progress and delays in completing each project phrase," the audit said.
There are also disagreements among the staff on granting delays in the project when change orders are given. "On five of the eight projects we reviewed, public works staff disagreed with one another on whether the change orders should have extended the construction completion time," the division said.
One project manager allowed an additional 42 days to complete the project because of a change order but the inspector on the project said it justified only seven more days. Such requests for extensions should be considered by the management immediately to determine if they are justified.
The board said it would implement the recommendation for closer tracking by September this year.
The audit said the board could save $1.4 million annually in construction costs in modifying the selection of designers and contractors. In construction contracts, the agency pre-qualifies those eligible to bid. The audit said the staff should do a performance evaluation of the contractor on past projects. And those that pass would be qualified to bid.
The public works board should identify errors and omissions made by design firms on state construction project, and it should seek to be compensated for them, the audit recommended.
"For example, an error in the design of an air duct required the contractor to use different materials than originally planned. This cost the state an additional $44,000," the audit noted.
The public works board, which consists of seven part-time members that direct the management, meets once a month. The audit suggests looking at a structural change. It said part-time board "can slow the decision-making process, since they only meet periodically."
The division said a full-time board should be considered such as the state Public Utilities Commission or the state Gaming Control Board. Or it might have the Public Works Board manager report directly to the governor.
In another audit released Monday, the division found the state Welfare Division has a higher than average administrative cost in running its child care assistance program. It could save $1.7 million a year by taking over more of the work that is now done by the Economic Opportunity Board in Las Vegas and the Children's Cabinet in Reno.
The report said the national average for administrative costs was 8.8 percent while Nevada's was 13.6 percent. The program spent $36.2 million in fiscal year 2004 with $9 million coming from the state. It provided an average monthly subsidy of $302 for child care of 4,871 youngsters whose low-income families were working, in school or in training to improve their job skills.
The welfare division said it has already started plans to move away from the contractors in Las Vegas and Reno.
In a third report, the division of internal audits found that Nevada's Medicaid program could receive an additional $2.1 million a year in federal revenue by changing its billing method. Medicaid provides health care to an estimated 177,000 low-income individuals, and the federal government picks up 55 percent of the more than $900 million a year.
The audit said the state can bill the federal government for services either based on a fee schedule or at cost. It suggests Medicaid bill the federal government on a cost basis that would result in more federal funds coming to the state.
For instance the state bills the federal government $87 an hour for outpatient counseling. If the billing method was changed to cost, it would mean $11 more in federal funds.
Medicaid said it is working on changing the system and it should be ready by December this year.
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