YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
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YELLOW SHEET Office of the State Auditor of Missouri |
December 2005
Report No. 2005-87
The following findings were noted as a result of an audit conducted by our office of the General Assembly and Supporting Functions – Committee on Legislative Research.
The Committee on Legislative Research's Oversight Division provides information to the General Assembly regarding the estimated fiscal impact of proposed legislation through fiscal notes developed with assistance from the affected agencies. However, there are no statutory provisions or other mechanisms which require or provide for the actual fiscal impact of legislative decisions to be reported to the General Assembly after legislation has been passed.
The audit disclosed various examples where the actual fiscal impact of legislative decisions was not determined and reported to the legislature. In some instances, the actual fiscal impact may have been significantly different than the fiscal impact estimated when the related legislation was being considered. Examples included:
· In July 1990, the state of Missouri agreed to provide annual funding of $12 million to pay debt service and other costs related to the construction of the Edward Jones Dome, which represented an expansion of the convention center in St. Louis. Prior to appropriating these funds, the state hired a private firm to conduct a economic impact study of the proposed project. The study, released in 1991, estimated the operation of the expanded convention center could result in $17 million in new state tax revenues. The study estimated that most of this growth in state revenues would result from an increase in the number of convention and trade shows held at the facility.
Our audit found that the state has never had a follow-up study conducted or taken any other steps to determine whether the fiscal benefits projected in the 1991 study were ever realized. We also noted that the number of conventions and trade shows held at the expanded convention center since the Dome opened has been consistently less than the number of such events projected by the study.
In the 1998 legislative session, legislation was passed which, among other things, increased the state income tax dependency deduction amount from $400 to $1,200. The fiscal note for this legislation estimated state revenues would decrease by approximately $68 million annually as a result of this change. Department of Revenue (DOR) officials indicated the amount state revenues decreased as a result of this legislation was not readily available. In addition, they indicated information regarding the actual fiscal impact of this change had not been requested by the General Assembly or any other legislative agency since this legislation was passed.
· In the 2003 legislative session, legislation was passed requiring all lottery and gaming winnings to be included in Missouri nonresident's adjusted gross income when the winnings were from a Missouri source. The fiscal note for this legislation estimated state revenue would increase by $6.6 million annually as a result of this change. DOR officials reported state revenues increased by $10.2 million in fiscal year 2004 as a result of this legislation. However, there was no indication this information had been requested by or provided to the General Assembly or any other legislative agency since this legislation was passed.
A means or mechanism should be established to ensure the actual fiscal impact of significant legislative decisions is reported to the General Assembly. Such information could be used by the General Assembly in evaluating past legislation and in making future legislative decisions. Considering the Committee's role in providing fiscal information to the General Assembly, it appears appropriate that it would be involved in this effort.
Various concerns were reported regarding the Committee on Legislative Research's personnel policies, some of which were reported in the previous audit. The committee provides its employees annual leave benefits that are more generous than what is allowed to most other state employees. Also, employees of this agency earn 10 hours of annual leave per month during the first five years of service, 12 hours per month after five years, and 14 hours per month after ten years. In contrast, most state employees earn annual leave of 10 hours per month during the first ten years of service, 12 hours per month after ten years, and 14 hours per month after fifteen years. There appears to be no basis for these additional annual leave benefits.
In August 2000, the Committee revised its sick leave policy, reducing the amount of sick leave earned by its employees from 14 to 10 hours per month to address a prior audit recommendation. However, the Committee did not adjust recorded employee sick leave balances to reduce the balances by the amount of sick leave earned at the higher rate. As a result, during the audit period the Committee certified excessive accumulated sick leave balances to the state retirement system for some employees when they retired from state employment. These excessive balances were used by the state retirement system to calculate creditable service and retirement benefit payments.
The Research Division does not require its employees to work a minimum of 40 hours per week, as is required of most other state employees. In accordance with provisions in the Committee's personnel manual, in May 2004, the Acting Director of the Research Division authorized most employees of that division to work a 7-hour per day, 35-hour workweek during that portion of the year after the session ended. This decision affected 23 of 26 Research Division employees.
Some of the findings noted above were included in our prior report.
Also included in the report are recommendations related to inventory controls and procedures, and capital assets.