SUMMARY OF: A Special Report on the Department of Commerce, Community, and Economic Development (DCCED); Division of Corporations, Business and Professionals Licensing (DCBPL); Select Occupational Licensing and Enforcement Issues, June 29, 2011

Purpose of the Report

In accordance with Title 24 of the Alaska Statutes and a special request by the Legislative Budget and Audit Committee, we have conducted a performance audit to determine: (1) whether DCBPL made the appropriate fee adjustments to licensing fees based on the results of the recent fee analysis; (2) whether FY 11 personal service time for occupational licensing and enforcement employees was accurately recorded; and (3) whether DCBPL has reduced its enforcement activities specified in Title 8 of the Alaska Statutes – specifically, in the area of unlicensed activity.

Report Conclusions

DCBPL did not make all of the appropriate fee adjustments resulting from the most recent fee analysis.

In FY 11, personal service time was accurately recorded for occupational licensing and enforcement employees. However, DCBPL used an unreasonable method for allocating indirect costs that result in overcharges to occupations. Additionally, DCBPL no longer tracks costs directly to occupations.

Due to a lack of complete and accurate investigation data, we could not reasonably identify all unlicensed activity cases. As a result, we could not determine whether DCBPL has reduced its Title 8 enforcement activities.

An issue creating a potential conflict of interest for a Marine Pilot board member was not adequately entered into the public record.

Findings and Recommendations

1. DCBPL’s director should ensure occupational licensing fees are adjusted annually in accordance with state law.

2. DCBPL’s director should improve the method for allocating division indirect costs and for tracking occupation direct costs.

3. DCBPL’s director should take immediate action to address deficiencies in the new investigations case management system.