DOPL budget hearing: auditors flag board cash balances, agency seeks pay increases for trades inspectors and vehicle replacements

The Division of Occupational and Professional Licenses told the Joint Finance-Appropriations Committee on Feb. 6 that it is working to address longstanding audit findings about excessive cash balances in several board funds, while also seeking targeted pay and one-time vehicle-replacement funding.

Audit findings and cash balances: April Renfro of the Legislative Audit Office summarized recent audits and said DOPL’s primary remaining open finding concerns board cash balances. The audit uses a reasonableness range — roughly 30% to 125% of annual expenditures based on a five‑year rolling average — to flag boards with balances that appear too high or too low. Renfro said DOPL has been providing reports and plans to legislative auditors to reduce excess balances and that fee changes or fee holidays are the primary tools to adjust reserves. "That report and the agency's plan most recently from this December is attached in SharePoint," the analyst said.

Agency structure and revenues: Analyst Kellen McGurkin told the committee that DOPL formed from consolidation of previously separate boards and agencies and now oversees about 45 boards and commissions representing nearly 300,000 licensees in July 2024; the agency reported an FTP cap of 267.2. The agency is funded entirely from dedicated and federal funds, with the State Regulatory Fund holding most receipts and the agencies managing diverse individual board cash balances.

Licensing system and efficiencies: Director Russ Baron said DOPL implemented a new licensing system in phased releases last summer and in November and that the system has increased online service and has the potential to deliver faster, sometimes same-day, licensing decisions. Baron said the system also helps avoid duplicate document submissions and permits cross-training of staff to process licenses across boards.

Personnel and enhancement requests: DOPL requested ongoing dedicated funding to increase pay for inspector positions in the Bureau of Building, Construction and Real Estate by an average of $0.95 per hour across 92 FTP, citing high turnover and exit interviews that identified pay as a primary cause of vacancies. Director Baron said inspectors’ turnover rates have ranged from 12% to 67% in recent years and that vacancies sometimes last months. The agency also requested one-time dedicated funds totaling $900,500 for vehicle replacements (a detailed list in the agency request included 16 Ford F-150s, five Ford Escapes, one Ford F-250 and one Ford Explorer) and $146,401 in one-time dedicated funds for recommended hardware.

Fee management and statutory tools: Baron described how fee reductions and fee holidays, plus planned legislation, are the practical levers DOPL will use to reduce excessive board cash balances. Auditors and DOPL staff cautioned that adjusting fee structures takes time to produce results and that growth in licensing activity can offset fee reductions.

Audit follow-up and oversight: Legislative auditors said they will continue follow-up work on the open cash-balance finding and that DOPL’s December plan will be reviewed in subsequent audits. Senator Hart, Representative Tanner and other members pressed DOPL for more granular analyses of which boards are driving balances and how those balances are changing year to year; Director Baron agreed to provide the committee with board-level plans and analyses.

Ending: Committee staff and members asked for continued updates and for DOPL to provide the committee with the agency’s plan and supporting data so lawmakers can evaluate fee and appropriation options in future sessions.