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SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Department of Public Safety’s Aviation Section (DPSA) as part of
a Sunset review of the agency. This audit was conducted pursuant to a June 16,
1999, resolution of the Joint Legislative Audit Committee. This audit was
conducted under the authority vested in the Auditor General by Arizona Revised
Statutes §41-2951 et seq. This is the first of several audits of the Department
of Public Safety.
The Department of Public Safety’s Aviation Section (DPSA)
is part of the Highway Patrol Division. DPSA employs 52 full-time staff and
provides a variety of airplane and helicopter services from several locations
across the State. The Aviation Section’s administrative office and airplane
(or fixed-wing) services are located in Phoenix at the Sky Harbor International
Airport. Using four fixed-wing airplanes, DPSA primarily provides transportation
and protection for the Governor and transportation to Department staff and other
state agency staff, and it also assists in law enforcement activities when
needed. DPSA’s helicopter services are provided from four regional Air Rescue
Units: Central Air Rescue in Phoenix, Northern Air Rescue in Flagstaff, Southern
Air Rescue in Tucson, and Western Air Rescue in Kingman. A pilot and paramedic
are always on duty at each of the four units to provide air ambulance (highway
automobile accidents), search-and-rescue (missing hikers), or law enforcement
services (aerial pursuits, surveillance, and tactical support).
DPSA Should Serve As
Backup Air Ambulance Provider
to the Private Sector
(See pages 9 through 17)
The expansion of the private air ambulance industry has
reduced the need for DPSA to provide air ambulance services. Although DPSA was initially the sole provider of air ambulance
services, today there are also 12 private providers, operating 28 helicopter
air ambulances in the State, and several additional private providers from
California, Nevada, and New Mexico who respond to calls along Arizona’s
borders. The private sector not only offers air ambulance services similar to
DPSA’s, but, in many cases, it can provide more enhanced services than DPSA
can. For example, 75 percent of private providers in Arizona use helicopters
that are more powerful than DPSA’s helicopters, allowing them to carry
greater patient loads. Private providers also regularly staff their ambulance
crews with two medical personnel, usually a paramedic and flight nurse. Only
two of DPSA’s four air rescue units regularly staff their crews with two
medical personnel, and only one of those two units utilizes a flight nurse.
Despite private air ambulance industry growth, DPSA continues
to operate as a primary provider, offering costly services that private air
ambulance providers could provide. Several factors encourage DPSA to continue
operating as a primary provider.
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Finally, DPSA has
the ability to respond to an accident without being formally dispatched or
without confirming the need for an air ambulance. When utilized, this practice
gives DPSA a competitive advantage over private providers because when an air
ambulance is needed, DPSA is more likely to be closer to the scene. However,
this practice can be costly when an air ambulance is not needed. During fiscal
year 1999, 43 percent of DPSA’s emergency medical missions ended in
cancellation because an air ambulance was not needed. Other states’ police
agencies and private air ambulance providers generally do not proceed to an
accident without formal dispatch and consequently reported much lower
cancellation rates.
Although DPSA defends its continued provision of air
ambulance services as a primary provider, its services are costly. The Air
Rescue Units cost about $1,081 per flight hour to operate and maintain. Last
year, DPSA flew 678 hours on medical missions, costing the State about
$733,000. Further, DPSA does not recuperate any of these costs because, unlike
the private sector, DPSA does not charge for its air ambulance services.
To ensure DPSA’s resources are used where needed most,
DPSA should act as a backup air ambulance provider, providing services only
when the private sector is unavailable or unable to respond in a timely
manner. By serving as backup provider, DPSA can focus its efforts on providing
search-and-rescue and law enforcement services because many entities, such as
county sheriff’s offices, rely on DPSA to provide aerial support for these
services.
DPSA Needs More Powerful
Helicopters to Conduct Some Missions
(See pages 19 through 24)
DPSA uses helicopters primarily to conduct air ambulance,
search-and-rescue, and law enforcement missions. Its fiscal year 1999 fleet
consisted of four single-engine Bell 206 helicopters. Historically, these
helicopters have not been powerful enough to conduct some of DPSA’s missions
safely and efficiently. As early as 1989, an aviation consultant found DPSA’s
helicopters to be underpowered. DPSA continues to struggle with these power
limitations by sometimes leaving behind equipment, staff, and fuel to
accommodate patient loads. However, other entities, such as the Maryland State
Police and private sector companies, which offer similar services, use more
powerful helicopters. In fact, 75 percent of Arizona’s private air ambulance
providers use helicopters that are more powerful than DPSA’s helicopters.
To make its fleet of helicopters safe and efficient, DPSA
will need additional funding to purchase up to three more powerful helicopters.
Although DPSA recently purchased or is in the process of purchasing two new,
more powerful single-engine helicopters (Bell 407s) to replace some of its
current fleet, additional replacement helicopters will be needed. Because the
cost of replacing and upgrading its helicopters will be significant, DPSA will
need to seek an increase in its General Fund appropriation to address any
equipment replacement needs.
However, DPSA should continue to research the feasibility of
using other monies to help offset a portion of its helicopter replacement costs.
For example, DPSA used Racketeering Influenced Corrupt Organization (RICO)
monies to offset the costs of an airplane in the past. The Department is
eligible to receive RICO monies when it participates in investigations of state
or federal racketeering crimes that result in forfeitures. However, relying on
RICO monies as a primary funding source would be difficult since there are
restrictive guidelines for their use and the amount of monies available from
year to year varies.
DPSA Not Charging Enough
to Support Air Transport Activities
(See pages 25 through 30)
DPSA does not charge enough for its air transport services to
cover the cost of providing this service to other governmental entities. DPSA’s
cost-recovery model—its method for determining what to charge for the air
transport services it provides—captures only a small percentage of the costs
associated with providing this service. DPSA’s model includes only the costs
for pilot overtime, maintenance (labor and parts) and fuel. In contrast, the
cost-recovery model that federal agencies use includes many more categories,
such as crew costs (salaries, benefits, training, etc.), insurance, and
depreciation. If DPSA were to compute its rates using the federal model
developed by the United States Office of Management and Budget (OMB), its rates
would be much higher and its reimbursements would almost triple. Specifically,
in fiscal year 1999, using full-cost rates, DPSA would have received $111,085
instead of only $37,261.
Although problems with DPSA’s cost model were identified as
early as 1992, DPSA has not significantly altered its model to more fully
recover costs. To ensure that it charges sufficiently to cover its air transport expenses, DPSA should adopt a more
comprehensive cost model that includes all the elements in the OMB’s full
cost-recovery model.
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