DOPL auditors flag excess cash balances; agency seeks pay boosts for inspectors and vehicle replacements

Analysts and the Division of Occupational and Professional Licenses (DOPL) told the Joint Finance-Appropriations Committee on Thursday that legislative auditors continue to report an open finding related to excessive cash balances in board accounts, and DOPL asked for targeted funding to address high turnover among inspectors and to replace vehicles and hardware.

Kellen McGurkin, budget and policy analyst for Legislative Services, summarized DOPL's organizational history and finances. He said DOPL was created by House Bill 318 of 2020 to consolidate licensing functions previously spread across 11 agencies; the division now oversees roughly 45 boards and commissions and about 200,000 licensees. McGurkin said the agency currently has a 267.2 FTP cap and that roughly 73% of FY 2024 expenditures were personnel costs.

McGurkin drew attention to a spike in receipts and transfers recorded in one year of the five-year review: "83,000,000 in receipts and transfers in FY '2022. This represents 50,000,000 in transfers from previous cash balances of the boards and commissions... and 30,000,000 in new revenues collected through licensing and board specific fees," he said. He added that DOPL is implementing fee reductions and seeking rule changes and statutory language to allow fee holidays as a tool to reduce excessive cash balances over time.

April Renfro of the legislative audit office told the committee that the open audit finding is concentrated on cash balances: "If they have cash balances 125% in excess of what they need for their annual expenditures that's probably too much cash... and if they have less than 30% that might be too little to cover their operations." She said DOPL has been providing analysis and plans to reduce balances and that the auditors will continue to follow up.

DOPL Administrator Russ Baron said turnover among field inspectors — plumbing, HVAC, electrical, elevator and other trades inspectors — has been high, ranging from 12% to 67% depending on program and year. He noted private-sector and municipal wages frequently exceed DOPL pay for the same trades and that vacancies sometimes remain open for months. To address recruitment and retention, DOPL requests a FY 2026 ongoing appropriation of $222,000 (dedicated funds) to increase starting pay for inspectors by an average of $0.95 per hour across 92 FTP. The division also requested $900,500 in one-time dedicated funds for vehicle replacements (including 16 Ford F‑150s, five Ford Escapes, a Ford F‑250 and an Explorer) and $146,401 one-time for hardware recommended by Office of Information and Technology Services.

Baron described the new licensing system implemented in phases in 2024 as an efficiency gain that should improve customer service and cross-training opportunities across boards. He also said DOPL has requested and been granted a transfer-exemption language to allow one-time transfers among bureaus that otherwise would be limited by a 10% transfer cap.

Committee members pressed for additional detail on which boards have the largest cash balances and where growth is coming from. Representative Tanner asked for a breakdown of which boards have excessive balances; Baron and staff said a plan and board-level analyses are in the December report attached to the audit and offered to provide more granular data to the committee. Senator Hart and others pressed DOPL on the timeline for reducing balances and on implementation of the audit recommendations.

Why it matters: DOPL is funded entirely by dedicated and federal fees rather than general funds; excessive cash balances across boards have drawn repeated audit attention and prospective changes to fee-setting and reporting could affect boards, licensees and stakeholder costs. High turnover among inspectors also has operational and public-safety implications because delayed inspections can slow business and housing projects and raise costs for customers.

What happens next: DOPL will provide board-level cash-balance plans and the administrator said the division will continue to implement fee adjustments, fee holidays and other steps in consultation with boards. Auditors will continue follow-up on the open cash-balance finding.