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SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Department of Environmental Quality—Vehicle Emissions Inspection
Program (Program) pursuant to an October 5, 2006, resolution of the Joint
Legislative Audit Committee. This audit was conducted as part of the sunset
review process prescribed in Arizona Revised Statutes (A.R.S.) §41-2951 et seq.1
This audit evaluated how well the Department of Environmental Quality
(Department) monitors the contractor that conducts the emissions tests.
The Program, begun in 1976, is limited to the Phoenix and
Tucson metropolitan areas. An independent consultant reported in 2005 that the
Phoenix Program effectively reduced emissions by requiring vehicles that fail
tests to be repaired. In fiscal year 2007, more than 1.4 million vehicles were
tested, and of these, nearly 200,000 failed the test on the first try. About
150,000 received repairs and passed a subsequent test. The current contractor,
who administers 13 testing stations in Phoenix and 3 in Tucson, has held the
contract since 1991. In July 2007, the Department again awarded the contract to
this contractor for a 7-year period beginning in January 2009. The new contract
includes provisions for lower vehicle testing fees, three new testing stations
in the Phoenix area, and shorter customer wait times.
Department should adjust its monitoring activities
to improve effectiveness, efficiency, and coverage
(see pages 13 through 21)
The contractor and the Department have developed a good
framework for ensuring that vehicle emissions testing is properly conducted,
with the contractor performing most of the quality control activities. Both
parties periodically audit vehicle testing equipment to ensure accurate
measurements. The contractor also has a program to ensure the equipment is
properly calibrated, and the Department receives reports that can allow it to
see if any testing lanes deviate significantly from the average in their
pass/fail rates. The contractor and the Department also review the performance
of the inspectors who conduct the tests.
Although the contractor and the Department have developed a
good framework, the Department may be able to reduce the number of its audits.
The Department's rules require it to perform more equipment audits than
federally required and the contractor conducts many equipment audits. In
addition, the contractor's program for ensuring that the equipment is properly
calibrated will not allow employees to use the equipment if the checks are not
performed or if the equipment is found out of calibration. Similarly, both the
Department and the contractor are reviewing inspectors' performance. Contract
monitoring best practices indicate that monitoring frequency and extent can be
reduced when results demonstrate consistent, satisfactory performance. The
Department should evaluate whether it can reduce its number of audits and still
meet monitoring objectives.
Reducing the number and frequency of equipment and inspector
audits would allow the Department to use the freed-up resources to address other
aspects of the monitoring process. For example, although audits are frequently
conducted, there is a lack of followup to ensure that equipment failing audits
is repaired and that the contractor takes corrective actions when inspectors
fail audits. In realigning its efforts, the Department would benefit from
developing a comprehensive contract monitoring plan, including assessing whether
employees need additional training to perform the new monitoring practices.
1
A sunset
audit normally includes an evaluation of the agency using 12 factors set forth
in A.R.S. §41-2954. This report does not include an evaluation using the 12
factors because Laws 2007, Ch. 171, §2 extended the Program's sunset date until
January 1, 2017.
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