Performance Audit of Environmental Health Services
September 11, 2013
While King County’s Environmental Health Services Division has reduced costs and introduced efficiencies, it needs a clear plan to guide decisions addressing fee equity issues for permit holders. EHS has begun efforts to improve rigor in the fee setting process. As part of these efforts, the Division needs to re-evaluate the fees it charges permit holders against the costs of providing services and how fees contribute to rebuilding fund balance reserves.
Audit Highlights
In response to a loss of revenue from the recent recession, EHS reduced costs and introduced efficiencies in the permitting process. These actions in conjunction with the recent fee increases have resulted in fee revenue exceeding the full costs of providing inspection services. This raises concern about fee equity and compliance with state requirements that fees not exceed actual costs. Without a strategic or financial plan to align financial polices with organization objectives, EHS lacks guidance on how to ensure that fees do not exceed the cost of inspections, or that some program fees do not subsidize the costs of providing inspection services to other programs.
EHS has begun efforts to add rigor to the fee setting process. However, more actions on the part of EHS and the Board of Health are needed to achieve equity among the fees that permit holders pay, including re-examining the data and assumptions EHS uses in calculating hourly rates and fund balance reserve needs. Also, EHS has not employed a rigorous approach when making staff allocation decisions that demonstrate it is aligning staffing resources to inspection workloads. Finally, on average, King County’s food program permit fees are higher than five of the six jurisdictions we surveyed.
Three recommendations in this report will improve strategic planning, financial planning, and the fee-setting process to address the equity issues that arise from fees not aligning with costs. Two other recommendations call for EHS to update and validate the assumptions it uses for setting rates and to follow best practices in determining staffing needs.
To meet the goal of providing safer, healthier places to live, learn, work, and play in King County, Environmental Health Services (EHS) manages the permit and inspection services for restaurants, pools, plumbing, solid waste facilities, and other programs. EHS received revenues of $20.4 million in 2012 from permit fees. The purpose of this audit was to understand the costs and the process that drive the fees from a permit holder perspective, while looking for opportunities for efficiencies and cost containment. We also followed up on recommendations made to EHS in an audit by our office in 2008.
Recommendation Status
Of the 5 recommendations:
- DONE: 5
Recommendations have been fully implemented. Auditor will no longer monitor. - PROGRESS: 0
Recommendations are in progress or partially implemented. Auditor will continue to monitor. - OPEN: 0
Recommendations remain unresolved. Auditor will continue to monitor. - CLOSED: 0
Recommendation is no longer applicable. Auditor will no longer monitor.