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Recently Published Reports

For brief summaries of reports that are pending, visit the Work Plan and Current Evaluations pages.

North Carolina Should Centralize Management of State Employee Supplemental Insurance Benefits (August 2015) 2015-07

North Carolina’s Retiree Health Benefit Fund contributes the State’s share of retiree premiums to the State Health Plan. Unfunded liability for the fund is $25.5 billion, and North Carolina is not a strong performer on measures used to compare the funded status of states. Several options to reduce the unfunded liability exist: increasing appropriations, shifting costs to the federal government, transitioning to a defined contribution model, reducing the number of individuals eligible, requiring contributions from active employees, and increasing the amount retirees pay for the benefit. To address the unfunded liability, the General Assembly should direct the State Health Plan to shift costs to the federal government by requiring eligible retirees to be on Medicare Advantage plans, generating an estimated savings of up to $64 million annually, and could appoint a joint committee to determine which other options to pursue in light of financial and legal considerations.

Executive Summary

Final Report

Presentation

Unfunded Actuarial Liability for Retiree Health is Large, but State Could Save Up to $64 Million Annually by Shifting Costs to Medicare Advantage Plans (July 2015) 2015-05

North Carolina’s Retiree Health Benefit Fund contributes the State’s share of retiree premiums to the State Health Plan. Unfunded liability for the fund is $25.5 billion, and North Carolina is not a strong performer on measures used to compare the funded status of states. Several options to reduce the unfunded liability exist: increasing appropriations, shifting costs to the federal government, transitioning to a defined contribution model, reducing the number of individuals eligible, requiring contributions from active employees, and increasing the amount retirees pay for the benefit. To address the unfunded liability, the General Assembly should direct the State Health Plan to shift costs to the federal government by requiring eligible retirees to be on Medicare Advantage plans, generating an estimated savings of up to $64 million annually, and could appoint a joint committee to determine which other options to pursue in light of financial and legal considerations.

Executive Summary

Final Report

Presentation

North Carolina Should Dispose of Unneeded Real Property and Improve Portfolio Management to Reduce Costs (June 2015) 2015-04

North Carolina’s Department of Administration (DOA) is responsible for managing the State’s portfolio of real property, consisting of nearly $28 billion in state-owned buildings and land and $65 million in annual expenditures for leased space. From a sample of 49 state-owned and leased properties, the Program Evaluation Division identified unneeded properties that could generate an estimated $14.3 million in one-time revenue and provide $2.6 million in future cost avoidance. PED found the State lacks a systematic process and data to identify unused and underutilized real property, and found DOA has not implemented portfolio management practices. The General Assembly should direct DOA to actively manage the State’s portfolio of real property; improve the completeness, accuracy, and security of the State’s inventory of real property; dispose of the unneeded properties identified in this report; and determine if suitable state-owned space can meet lease requests. The General Assembly should also modify state law to require state agencies to collect, track, and report data on state-owned and leased space and maintain a current facilities management plan.

Executive Summary

Final Report

Presentation

Handouts

North Carolina Should Eliminate the Use of Personal Services Contracts in Favor of Using Existing Mechanisms (February 2015) 2015-03

In order to ensure open competition and transparency, the procurement of goods and services by North Carolina state agencies and institutions is subject to numerous laws, rules, and regulations. The Program Evaluation Division found that agencies and institutions have circumvented state law when procuring personal services and have also compensated contractors at high rates. In addition, Executive Branch agencies have violated state law by not obtaining approval for IT personal services contracts, and the Office of Information Technology Services (OITS) lacks a process to ensure compliance. Personal services contracts are unnecessary because mechanisms with greater oversight already exist. The General Assembly should enact legislation prohibiting the use of personal services contracts; requiring Executive Branch agencies to use these existing mechanisms; and requiring OITS and the Office of State Budget and Management (OSBM) to approve the procurement of IT services from individuals, report on a biennial basis, and conduct compliance reviews.

Executive Summary

Final Report

Presentation

Recommendations

Implications of Funding Alcohol and Substance Abuse Treatment or Prevention with Alcohol Tax Earmark (February 2015) 2015-02

The impetus for this study was a request from the Alcoholic Beverage Control(ABC) Commission to the General Assembly to redirect the $1.4 million alcohol tax earmark from the Department of Health and Human Services (DHHS) and substance abuse treatment services to the ABC Commission's underage drinking prevention initiative. During the course of this project, the ABC Commission approved an increase in the bailment surcharge, a fee that funds the Commission's operations, to pay for the underage drinking prevention program, and therefore no longer needs the DHHS earmark. This report first details how DHHS uses the $1.4 million alcohol tax earmark and the potential consequences of redirecting the funding to the ABC Commission. Next, the report describes the ABC Commission's past and present efforts to create and fund an underage drinking program, called Talk It Out. Finally, this report presents actions that the General Assembly could take to ensure the Talk It Out program is successful.

Executive Summary

Final Report

Presentation

Licensing Processing Fees Are Inequitable; Permit DOI Vendor to Charge Different Processing Fees Based on Effort and Cost (January 2015) 2015-01

The Department of Insurance's (DOI's) Agent Services Division (ASD) issues licenses to the insurance industry, the bail bond industry, and non-insurance business entities. DOI entered into a contract with Pearson VUE in December 2011 to provide administrative services for all license types regulated by the department. The Program Evaluation Division found that Pearson VUE's licensing processing fees are disproportionate to the relative cost of processing the different types of license applications. PED also found that DOI has improved licensure services through outsourcing, and that ASD continues to work with Pearson VUE to address licensee concerns. The General Assembly should direct ASD to issue a request for proposal for licensing administrative services that allows the contractor to charge different processing fees based on the cost and effort necessary to process licenses for the different industries.

Executive Summary

Final Report

Presentation

Handouts

Occupational Licensing Agencies Should Not be Centralized, but Stronger Oversight is Needed (December 2014) 2014-15

Occupational licensing agencies (OLAs) are state agencies that regulate the licensure of persons within a particular profession or occupation but that receive no state general revenue and are not subject to legislatively mandated spending restrictions. PED found that transferring regulatory authority or administrative responsibilities from OLAs to a central state agency may not result in improved performance and would likely entail significant implementation costs. PED also determined that there is insufficient state-level oversight to ensure OLAs are efficiently and effectively protecting the public. The General Assembly should establish an Occupational Licensing Commission to assist the General Assembly and OLAs in improving effectiveness and resolving disputes; ensure that the OLAs required to comply with reporting requirements are clearly defined and listed; ensure the complaint process used by OLAs includes specified capabilities and attributes; and assign a legislative committee to evaluate the continuing need for licensing authority for 12 identified OLAs.

Executive Summary

Final Report

Presentation

Handout

DHHS Should Integrate State Substance Abuse Treatment Facilities into the Community-Based System and Improve Performance Management (November 2014) 2014-14

North Carolina's public system for adult substance abuse treatment has two primary components—the community-based system of Local Management Entities/Managed Care Organizations (LME/MCOs) and the three state-operated Alcohol and Drug Abuse Treatment Centers (ADATCs). Separation of the ADATCs from the community-based system creates operational silos which impose challenges to utilization management and continuity of care and limits the State's ability to address service gaps and manage cost. North Carolina also lacks an adequate performance management system that tracks long-term outcomes of public substance abuse treatment. The General Assembly should require the Department of Health and Human Services to integrate the ADATCs into the community-based system by transitioning funding to LME/MCOs and requiring LME/MCOs to pay for services at the ADATCs. The General Assembly should also direct the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to strengthen its performance management by tracking long-term outcomes of treatment.

Executive Summary

Final Report

Presentation

Handouts

Overnight Respite Pilot at Adult Day Care Facilities Perceived as Favorable, but Lacked Objective Measures of Success (October 2014) 2014-11

Session Law 2011-104 authorized the Department of Health and Human Services to pilot an overnight respite program in four facilities that provide adult day care and directed the Program Evaluation Division to evaluate its success. Stakeholders perceive the pilot as successful, but only one of the facilities consistently provided overnight respite. PED found the legislative mandate for the pilot and its implementation by DHHS only met two of ten recommended components of a well-designed pilot program. In addition, the legislative prohibition against using state or Medicaid funding for the pilot hindered its effectiveness. Furthermore, no organization affiliated with respite care maintains data on the need for the service. The General Assembly should allow the pilot program authorizing overnight respite at adult day care facilities to expire on June 1, 2015, and require state agencies and institutions initiating pilot projects to adhere to standards established by UNC's School of Government.

Executive Summary

Final Report

Presentation

North Carolina Needs a Coordinated Strategy to Guide the Changing Landscape of Veterans Programs (September 2014) 2014-10

In State Fiscal Year 2013–14, North Carolina state agencies and public higher education institutions operated 23 programs for veterans, 11 of which spent $53.9 million solely on veterans and their families. However, few of these programs track outcome data, and therefore the State cannot determine the extent to which they improve the lives of their intended beneficiaries. Although the Governor recently created a Working Group on veterans via executive order, North Carolina lacks a coordinated and comprehensive effort to support veterans in the State. The General Assembly should establish the Task Force on Veterans, Service Members and their Families in statute, direct this group to develop and implement a statewide strategic plan to track and improve services for veterans and their families, direct state entities to track and report information to the Task Force, and create a legislative oversight committee to monitor and oversee the implementation of this plan.

Executive Summary

Final Report

Presentation

Handouts

Revising State Child Support Incentive System Could Promote Improved Performance of County Programs (July 2014) 2014-08

North Carolina's child support program operates under a state-supervised, county-administered model. Based on federal performance measures, the program ranks only 24th among the 50 states. The Child Support Services State Office does not effectively use its federal incentive award to promote improved county program performance. Additionally, the CSS State Office has not established specific spending guidelines and does not track incentive payment expenditures. The General Assembly should direct the CSS State Office to retain 25% of federal incentive money to improve centralized services and provide employee incentive bonuses, and should direct counties to report how incentive payments are being reinvested and to maintain their level of expenditures.

Executive Summary

Final Report

Presentation

Handouts

Program Evaluation Division, North Carolina General Assembly
Legislative Office Building, Suite 100
300 North Salisbury Street , Raleigh, NC 27603-5925
919-301-1404