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Table of Contents

Budget in a Flash

Agency Operating Budget Detail

Accountancy, State Board of .......................................................... 5 Acupuncture Board of Examiners ................................................. 8 Administration, Arizona Department of ................................. 12 Administrative Hearings, Office of ............................................ 25 African-American Affairs ............................................................... 28 Agriculture, Arizona Department of ......................................... 29 Arizona Health Care Cost Containment System.................. 33 Appraisal, State Board of .............................................................. 43 Arts, Arizona Commission on the .............................................. 45 Athletic Training, State Board of ................................................ 48 Attorney General - Department of Law .................................. 50 Automobile Theft Authority ......................................................... 56 Barbers Examiners, Board of ........................................................ 59 Behavioral Health Examiners, Board of ................................... 62 Charter Schools, State Board for................................................ 64 Child Safety, Department of ........................................................ 68 Chiropractic Examiners, State Board of ................................... 79 Citizens Clean Elections Commission ..................................... 81 Commerce Authority ...................................................................... 83 Community Colleges, Arizona..................................................... 87 Constable Ethics Standards and Training Board ................. 91 Contractors, Registrar of ............................................................... 93 Corporation Commission .............................................................. 96 Corrections, Department of ....................................................... 100 Cosmetology, Board of ................................................................ 108 Criminal Justice Commission, Arizona ................................... 111 Deaf and Blind, State Schools for the .................................... 115 Deaf and Hard of Hearing, Commission for the ............... 118 Dental Examiners, State Board of ............................................ 121 Early Childhood Development and Health Board ............ 123 Economic Security, Department of ......................................... 124 Education, State Board of ........................................................... 134 Education, Department of .......................................................... 136 Emergency and Military Affairs, Department of ................ 145 Environmental Quality, Department of ................................ 150 Equal Opportunity, Governors Office for ............................ 154 Equalization, State Board of ..................................................... 156 Executive Clemency, Board of ................................................... 158 Exposition and State Fair, Arizona........................................... 160 Financial Institutions, Department of ..................................... 162

Fingerprinting, Board of................................................................. 169 Fire, Building and Life Safety, Department of ....................... 171 Forester, Arizona State ................................................................... 175 Funeral Directors and Embalmers, State Board of .............. 179 Game and Fish Department ......................................................... 182 Gaming, Department of ................................................................. 188 Geological Survey, Arizona ........................................................... 191 Governors Office .............................................................................. 194 Governors Office of Education ................................................... 197 Governors Office of Strategic Planning and Budgeting .. 200 Health Services, Department of .................................................. 202 Highway Safety, Governors Office of ...................................... 210 Historical Society, Arizona ............................................................ 212 Historical Society, Prescott ........................................................... 215 Homeland Security ........................................................................... 218 Homeopathic Medical Examiners, Board of .......................... 220 Housing, Arizona Department of ............................................... 222 Independent Redistricting Commission .................................. 226 Indian Affairs, Arizona Commission of .................................... 228 Industrial Commission of Arizona ............................................. 231 Insurance, Department of ............................................................. 234 Judiciary ................................................................................................ 238 Juvenile Corrections, Department of ........................................ 243 Land Department, State ................................................................. 247 Legislature

Auditor General ............................................................................ 252 House of Representatives ......................................................... 254 Joint Legislative Budget Committee .................................... 256 Legislative Council ....................................................................... 258 Senate ............................................................................................... 260

Liquor Licenses and Control, Department of ........................ 262 Lottery Commission, Arizona State ........................................... 267 Massage Therapy .............................................................................. 270 Medical Board, Arizona .................................................................. 273 Mine Inspector, State ...................................................................... 277 Naturopathic Physicians Board of Medical Examiners ...... 280 Navigable Stream Adjudication Commission ....................... 283 Nursing, State Board of .................................................................. 286 Nursing Care Institution Administration Examiners ........... 289 Occupational Therapy Examiners, Board of .......................... 292 Opticians, State Board of Dispensing ....................................... 294 Optometry, State Board of ........................................................... 297

OSHA Review Board ........................................................................ 300 Osteopathic Examiners, Board of .............................................. 302 Parks Board, State ............................................................................ 306 Personnel Board ................................................................................ 311 Pest Management, Office of ........................................................ 314 Pharmacy, Arizona State Board of ............................................ 317 Physical Therapy Examiners, Board of ..................................... 320 Pioneers Home, Arizona ............................................................... 324 Podiatry Examiners, State Board of ......................................... 327 Postsecondary Education, Commission for ........................... 329 Power Authority ................................................................................ 332 Private Postsecondary Education, State Board for ............. 333 Psychologist Examiners, State Board of .................................. 336 Public Safety, Department of ...................................................... 339 Public Safety Personnel Retirement System ......................... 345 Racing, Arizona Department of .................................................. 346 Radiation Regulatory Agency ..................................................... 349 Real Estate, Department of .......................................................... 352 Residential Utility Consumer Office .......................................... 355 Respiratory Care Examiners, Board of ..................................... 358 Retirement System, Arizona State ........................................... 360 Revenue, Department of ............................................................... 364 School Facilities Board ................................................................... 369 Secretary of State - Department of State............................... 374 State Boards Office .......................................................................... 378 Tax Appeals, State Board of ......................................................... 381 Technical Registration, State Board of ................................... 383 Tourism, Office of ............................................................................. 386 Transportation, Department of .................................................. 389 Treasurer, State ................................................................................. 395

Universities Regents, Board of ........................................................................ 397 Arizona State University Tempe ......................................... 400 Arizona State University Polytechnic................................ 404 Arizona State University West ............................................. 407 Northern Arizona University .................................................... 410 University of Arizona Main Campus ................................. 415 University of Arizona Health Sciences Center .............. 419

Veterans Services, Department of ............................................ 422 Veterinary Medical Examining, State Board of .................... 426 Water Infrastructure Finance Authority ................................... 430 Water Resources, Department of ............................................... 432 Weights and Measures, Department of ................................. 436

Additional Changes

Allocation of Statewide Adjustments ....................................... 439 Proposed Legislative Changes .................................................... 450

Reference

General Fund Revenue by Agency ............................................ 456 Other Fund Revenue by Agency ................................................ 460 Assumptions & Methodology ..................................................... 464 Summary of FY 2015 Expenditures by Object ...................... 467 Summary of FY 2016 Appropriations by Object .................. 481 Summary of FY 2016 Executive Recommendation ............. 495 Summary of FY 2017 Agency Requests by Object ............. 509 Summary of FY 2017 Executive Recommendation ............. 523 Administrative Costs........................................................................ 537 Glossary - Budget Terms ............................................................... 540 Glossary - Acronyms ....................................................................... 545 Resources ............................................................................................. 548 Acknowledgement ........................................................................... 549

CASH FLOWPrelim Actual Executive Recommendation Executive Recommendation Executive Recommendation Executive Recommendation

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019Beginning Balance 577,400 311,635 484,014 620,781 856,644 (thousands)

Adj. Base Revenues 8,932,969 9,238,148 9,516,800 9,869,438 10,177,120New Revenue Changes - - - - - One-time Revenues 70,660 235,195 100,000 2,636 -

Total Revenues 9,003,629 9,473,342 9,616,800 9,872,074 10,177,120

Enacted Base Spending 9,269,394 9,195,913 9,195,913 9,480,034 9,636,210Baseline Changes - 78,861 115,856 282,359 299,017New Initiatives - 26,190 168,265 (126,182) (3,510)

Total Spending 9,269,394 9,300,964 0.34% 9,480,034 1.93% 9,636,210 1.65% 9,931,718 3.07%

Ending Balance 311,635 484,014 620,781 856,644 1,102,046

STRUCTURAL BALANCEPrelim Actual Enacted + Supplemental Forecast Forecast Forecast

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019Ongoing Revenues 8,932,969 9,238,148 3.4% 9,516,800 3.0% 9,869,438 3.7% 10,177,120 3.1%Ongoing Spending 9,269,394 9,262,304 -0.1% 9,343,515 0.9% 9,636,210 3.1% 9,931,718 3.1%

Structural Balance (336,425) (24,156) 173,285 233,227 245,402

FY 2015 actual

$4.2B

$3.8B

$0.7B

Other $0.3B

Total $8.9B

Executive Budget In-A-Flash

REVENUE GROWTH FORECAST

YOY% growth

YOY% growth

Transaction Privilege Tax (TPT)

Individual Income Tax(IIT)

Corporate Income Tax (CIT)

Forecasted Year Over Year Growth

BUDGET GOALS

Balance budget- Structural balance in FY 2017 - Maintain the long-term health of the General Fund

Manage risk- Maintain reserve keep for a rainy day- Allow for mid-year adjustments

Spend responsibly- Strengthen our schools- Opportunity for all- Protect our communities- Small and efficient government

-

2.0

4.0

6.0

8.0

10.0

12.0

FY2002

FY2004

FY2006

FY2008

FY2010

FY2012

FY2014

FY2016

FY2018

Billi

ons

$

General Fund Total Revenueand Spending

Total GF Revenues

Total GF Spending

Revenue Forecast

Spending Forecast

$1,004

$76

($1,266)

($3,000)

($3,401)

($2,203)

($409)($364)

($411)($336)

($24.2)

$173.3 $233.2

$245.4

(4,000)

(3,500)

(3,000)

(2,500)

(2,000)

(1,500)

(1,000)

(500)

0

500

1,000

1,500

Mill

ions

$

General Fund Structural Balance

3.3% 4.0% 4.2% 3.4%

2016 2017 2018 20194.8% 5.2% 5.3% 4.0%

2016 2017 2018 2019

3.4% 3.0% 3.7% 3.1%

-7.0% -8.7% -10.6%-4.9%

2016 2017 2018 2019

2016 2017 2018 2019

SPENDING New FY 2016 Spending: 105,050,725$ New FY 2017 Spending: 284,120,747$

Prelim Actual Executive Recommendation Baseline Issues New Initiatives Executive Recommendation

(thousands) FY 2015 FY 2016 FY 2017 FY 2017 FY 2017K-12 Education (ADE) 3,835,254 3,941,874 46,461 7,799 3,996,133 1.4%Health Care (AHCCCS) 1,225,883 1,205,162 547,516 2,210 1,754,888 46%Corrections 996,846 1,035,087 27,519 3,988 1,061,408 2.5%Universities 768,422 664,921 5,951 8,000 674,796 1.5%Economic Security (DES) 482,587 504,282 32,371 14,521 543,074 7.7%Child Safety (DCS) 361,005 404,245 49,794 (10,320) 395,923 -2.1%Health Services (DHS) 619,489 625,291 (511,553) 1,513 92,698 -85%Other Agencies 820,984 820,918 (51,592) 102,491 854,478 4.1%Capital Projects 24,200 6,200 (6,200) 25,738 25,738 315%IT Projects 35,500 7,783 (7,783) 11,882 11,882 53%Other 99,224 85,200 (16,626) 443 69,017 -19%Total 9,269,394 9,300,964 A 115,856 B 168,265 C 9,480,034 1.93%

NEW SPENDING PROFILE

A Supplemental: spending in current year for baseline or initiatives.FY 2016 Supplemental: $105.1M (Added to FY 2016 Enacted Base of $9,195.9M)

$78.9M is for baseline issues.

B Baseline: caseload, cost adjustments and spending necessary to provide the current level of service.FY 2017 Baseline: $115.9M

Virtually all spending is for caseload or cost adjustments.Virtually all spending is ongoing.

C Initiatives: other spending.FY 2017 Initiatives: $168.3M

$136.8M is one-time (81%).

YOY% growth

19%

14%

11%

5%

17%

14%

18%

3%

K

A

C

E

C

O

C

FY 2017 baseline and initiatives41.6%

18.1%

8.4%10.0%

7.4%

14.6%

42.2%

19.5%

11.2%

7.1%

9.9% 10.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

K-12Education

AHCCCS &DHS

Corrections Universities DES & DCS Other*

% o

f Gen

eral

Fun

d Ex

pend

iture

s

General Fund Spending Distribution

FY 2007 Enacted ($9.7B*)

FY 2017 Projected ($9.5B*)

* excludes admin adjustments, revertments, transfers, and capital

21%

5%

4%

8%

45%

17%

K-12 Education

AHCCCS & DHS

Corrections

Universities

Economic Security

Child Safety

Other Agencies

Capital, IT, Other

FY 2016 supplemental

2016 2017 2018 2019

The FY 2017 Executive Budget Recommendation allows for

General Fund spending to grow by less than 2% (compared to

the previous year), which is less than the 3.2% forecasted population growth plus

inflation in 2017.

SPENDING BREAKDOWN

K-12 EDUCATION CHILD SAFETY CORRECTIONS$47.8M FY 2016 Supplemental $5.2M FY 2016 Supplemental

$39.0M for caseload growth $5.2M to extend Corizon health contract, delays procurement$15.0M for central administration and overtime $27.5M FY 2017 Baseline$11.0M to eliminate deferral $17.6M for 1,000 medium custody beds$2.9M for litigation $9.8M for inmate health care adjustment$1.9M to resolve AG structural deficit $1.0M for retirement contribution adjustment

$46.5M FY 2017 Baseline ($188.4M in land trust funds) ($22.0M) in funding solutions to offset General Fund need ($929,100) from removal of leap year adjustment$91.2M for enrollment growth (1.55%, 1.4% in FY16) $39.5M FY 2017 Baseline and Initiatives $4.0M FY 2017 Initiatives$60.5M for inflation (1.04%, 1.6% in FY16) Fully fund children in State care $2.3M for maximum custody sergeants$26.0M to supplement Homeowner's Rebate $21.0M for support service caseload growth $1.6 for Northern Community Corrections Center$4.9M to offset Commercial Property Tax phase-down $18.0M for out-of-home placement caseload growth $103,500 for re-entry planners($40.0M) from switching districts to current year funding $8.8M for permanency subsidy caseload growth($39.9M) from new construction property tax savings Improve operations CAPITAL & IT($30.0M) JTED reduction $11M for central administration, operations and IT separation $25.7M FY 2017 ADOA Capital Initiatives($16.3M) from increased land trust projections $4.0M for case aides, overtime and strategic pay $20.4M for high priority building system upgrades($7.3M) from multi-site charter small school weight $1.9M to resolve AG structural deficit $5.3M for major building renovations on Capitol Mall($2.6M) from district-sponsored charter phase-out ($350,000) to shift ICAC grant to AG $11.9M FY 2017 IT Initiatives

$7.8M FY 2017 Department of Education Initiatives Reduce General Fund liability $7.3M to finish Education data system$4.6M for tests and test security ($25.0M) in funding solutions to offset General Fund need $4.6M to begin design and build of Child Safety data system$3.2M for data system support

$36.3M Other Education Initiatives ECONOMIC SECURITY OTHER$30.0M for three-year JTED grant program $8.1M FY 2016 Supplemental $17.1M FY 2016 Supplemental$6.0M for AP testing grants $15.0M for School Facilities Board building renewal grants$200,000 for updating K-12 academic standards

$8.1M for DDD caseload growth$32.4M FY 2017 Baseline $2.1M for Presidential Preference Election

$100,000 for Principal Academies $30.0M for DDD Medicaid population growth $746,700 to restore Army and Air Guard facilities state match$2.4M for DDD room and board $408,300 for Attorney General support to DCS

UNIVERSITIES $14.5M FY 2017 Initiatives $146,700 Forester risk management increase$4.1M FY 2016 Supplemental for HITF correction $6.4M for child care subsidy rate increase ($1.3M) from Schools Facilities Board debt service reduction$6.0M FY 2017 Baseline for debt service and HITF correction $4.7M for vocational rehabilitation ($74.3M) FY 2017 Baseline$8.0M FY 2017 Initiatives $3.0M for adult protective services $66.6M FY 2017 Initiatives

$4.3M for resident student funding - ASU $1.2M for ALTCS Adult Preventative Dental $31.5M for border security, strike force expansion$2.2M for resident student funding - UA ($856,200) from streamlining SNAP and TANF requirements $15.0M for School Facilities Board building renewal grants

$1.5M for resident student funding - NAU $10.0M for State Parks capital projects HEALTH SERVICES $10.0M for Budget Stabilization Fund transfer

HEALTH CARE (AHCCCS) $22.6M FY 2016 Supplemental $6.3M for Attorney General support to DCS$547.5M FY 2017 Baseline $17.6M for behavioral health services caseload growth $3.0M for Court dependency surge

$517.3M for the transfer of Behavioral Health Services $4.6M to resolve revenue shortfall at Arizona State Hospital $1.6M for tobacco tax enforcement operations$24.1M for behavioral health services caseload growth $378,300 for security officers and nurses $1.5M for state match to Army and Air Guard facilities$6.7M for acute and long-term care caseload growth ($511.6M) FY 2017 Baseline ($12.3M) other issues($607,500) in administrative savings from BHS transfer $4.6M to resolve revenue shortfall at Arizona State Hospital

$2.2M FY 2017 Initiatives $1.2M to backfill prescription drug funding at ASH$1.4M for preventive dental care for long-term patients ($517.3M) to transfer Behavioral Health Services to AHCCCS STATEWIDE HIRING FREEZE$743,900 for security and performance improvement $1.5M FY 2017 Initiatives$107,300 for fraud prevention $1.5M for security officers and nurses Agency FY 2017 Reduction

Economic Security ($2.6M)Health Services ($1.8M)AHCCCS ($603,000)Revenue ($573,400)Other (26 agencies) ($2.4M)

Total ($8.0M)

In FY 2016 a hiring freeze was imposed on new State hires. The FY 2017 Executive Budget reduces Agency's General Fund appropriations in accordance with expected hiring freeze-related savings. Exemptions: Public safety-related entities, including Child Safety, Corrections, the Department of Public Safety, and the Department of Emergency and Military Affairs, are exempted from hiring freeze-related budget reductions. Agencies that do not receive General Fund, the Secretary of State and the Attorney General's Office are also excluded.

SETTLEMENT TERMS

- $3.5B in additional funds over 10 years- Resets base per pupil funding at $3,600, up from $3,427- In FY 2016, $52.4M additional General Fund and $172.0M additional land trust funds, for base funding increase

BoardofAccountancyTheArizonaStateBoardofAccountancyconsistsoffiveCertifiedPublicAccountants(CPAs)andtwopublicmembers,allofwhomareresidentsofthestateandareappointedbytheGovernor.TheBoardalsohassixadvisorycommitteesconsistingof46membersappointedbytheBoardwhoseworkdirectlysupportstheBoard'smission.TheadvisorycommitteesareAccountingandAuditing,TaxPractice,PeerReview,Certification,ContinuingProfessionalEducation,andLawReview.TheBoardanditscommitteesqualifycandidatesfortheUniformCPAExamination,certifyindividualstopracticeasCPAs,registeraccountingfirmsownedbyCPAs,andbienniallyrenewcertificatesforCPAsandregisteredaccountingfirms.TheBoardanditscommitteesalsoreceiveandinvestigatecomplaints,takeenforcementactionagainstlicenseesforviolationofstatutesandregulations,monitorcompliancewithcontinuingeducationrequirements,andreviewtheworkproductofCPAstoensureadherencetoprofessionalstandardsthroughtheBoard'speerreviewprogram.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITE http://www.azaccountancy.gov/Allnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary

Actual Exp.Plan Exec.Rec.FY2015 FY2016 FY2017

NetChangeFY2017

OtherAppropriatedFunds 1,400.8 1,939.1 1,939.10.0

1,400.8 1,939.1 1,939.1AgencyTotal 0.0

Recommendedstatewideadjustmentsforall:health,dental,andlifeinsurancepremiums;rent;retirementcontributions;andhiringfreezesavingsarelistedseparately,andcanbefoundimmediatelyaftertheWeightsandMeasuressection.Theallocationofstatewideadjustmentsforthisagencyarenotincorporatedintothetotalsshownhere,butarerecommendedaspartoftheExecutiveBudget.

PerformanceMeasures

ExpectedExpectedActualActualFY2014 FY2015 FY2016 FY2017

Percentofapplicantsreportingverygoodorexcellentservice 94 89 92 92Numberofcompliancefilesestablished 97 120 109 109NumberofexamcandidatesapprovedbyBoardtositfortheUniformCPAexam

451 414 433 433

Numberofcertificatesissued 432 397 415 415Numberoffirmsregistered 120 79 100 100

Linktothe AGENCY'SSTRATEGICPLAN

AgencyOperatingDetail BoardofAccountancy5

10,000

10,500

11,000

11,500

12,000

12,500

13,000

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

NumberofCertifiedPublicAccountants

AgencyExpenditures

0

500

1,000

1,500

2,000


Al l Funds

(in$1,000s)

RecommendedStateAppropriations

Actual Approp. Exec.Rec.FY2015 FY2016 FY2017

NetChangeFY2017BYPROGRAM

Certification,Registration,andRegulation 1,400.8 1,939.1 1,939.10.0

1,400.8 1,939.1 1,939.1AgencyTotalAppropriatedFunds 0.0


NetChangeFY2017BYEXPENDITUREOBJECT

PersonalServices 620.4 821.0 821.00.0EREAmount 271.0 346.5 346.50.0Prof.AndOutsideServices 294.6 440.6 440.60.0TravelInState 1.8 5.0 5.00.0TravelOutofState 6.9 10.6 10.60.0OtherOperatingExpenses 192.7 275.9 275.90.0Equipment 8.4 24.5 24.50.0TransfersOut 5.0 15.0 15.00.0


6BoardofAccountancy FY2017ExecutiveBudget


NetChangeFY2017BYAPPROPRIATEDFUND

AccountancyBoardFund 1,400.8 1,939.1 1,939.10.0


CLICKONFUNDNAMEFORTHEFUND'SSOURCESANDUSESREPORTLinktothe MONTHLYCASHFLOWREPORTS

TheExecutiverecommendsalumpsumappropriationtotheagency.

AgencyOperatingDetail BoardofAccountancy7

AcupunctureBoardofExaminersTheBoardlicensesandregulatesacupuncturistsandcertifiesauricular(ear)acupuncturistsfordetoxificationorsubstanceabuseprograms.TheBoardalsooverseesthelicensingandcertificationofacupuncturetrainingandpreceptorshiptrainingprograms,continuingeducationprograms,andvisitingprofessors.TheBoardevaluatesprofessionalcompetency,investigatescomplaints,andenforcesthestandardsofpracticefortheacupunctureprofession.TheBoardregulatestheeducational,clinical,andcleanneedletechniqueprogramsapprovedtoteachthepracticeofacupunctureintheState.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITE http://www.azacupunctureboard.us/Allnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary


NetChangeFY2017

OtherAppropriatedFunds 144.3 159.1 178.219.1

144.3 159.1 178.2AgencyTotal 19.1

MainPointsofExecutiveRecommendations

FY2017FY2016

13.2AnnualLeavePayoutforRetiringExecutiveDirector 0.0

5.9BoardMemberTraining 0.0

3.0Rulemaking 0.0

MajorExecutiveInitiativesandFundingRecommendationsAnnualLeavePayoutforRetiringExecutiveDirector

ThedirectoroftheAcupunctureBoardofExaminersisplanningtoretireinFY2017.TheExecutiverecommendsonetimefundingintheamountof$13,200tocovertheretiringdirectorsannualleavepayout.

FY2017Funding13.2AcupunctureBoardofExaminersFund

13.2IssueTotal

BoardMemberTraining

HB2087,Laws2014mandatesspecifictrainingformembersofahealthprofessionregulatoryboard.TheAcupunctureBoardisaninememberboardandhasnewappointmentseachyear.

Boardmembertrainingisconductedinternally;however,aftertheBoardsdirectorretires,whichisanticipatedtooccurinFY2017,accesstoprofessionaltrainingserviceswillbecomenecessary.

TheExecutiverecommendsanincreaseof$5,900inFY2017toallowtheBoardtocontractwithprofessionalservicesforboardmembertraining.

8AcupunctureBoardofExaminers FY2017ExecutiveBudget


5.9IssueTotal

Rulemaking

InFY2016,theExecutiverecommendedonetimefundingof$3,000forrulewriting.A.R.S.323924requirestheBoardtoadoptnewrulesregardingfingerprintingbyJuly1,2016.

FurtherclarificationisneededfromtheLegislatureregardingtheenactedstatute,andtheAcupunctureBoardofExaminersanticipatesfurthercostsassociatedwiththerulewritingprocessinFY2017afterclarificationisreceived.TheExecutiverecommendsonetimefundingintheamountof$3,000fortherulewritingprocessinFY2017.


3.0IssueTotal

BaselineRecommendationsRemoveOneTimeFunding

InFY2016,theBoardreceivedaonetime$3,000increaseforrulemaking.TheExecutiverecommendseliminatingthisonetimefunding.

FY2017Funding

(3.0)AcupunctureBoardofExaminersFund(3.0)IssueTotal


PerformanceMeasures


Numberofrenewalsissued 528 557 570 580Numberofinvestigationsconducted 27 1 10 10Totalnumberoflicensees 565 593 605 610Totalnumberofauricularacupuncturecertificateholders 31 37 40 45Numberofapplicationsreceived 75 89 95 100


AgencyOperatingDetail AcupunctureBoardofExaminers9

0

100

200

300

400

500

600


NumberofRenewalsIssued

AgencyExpenditures

0

50

100

150

200


Al l Funds

(in$1,000s)




LicensingandRegulation 144.3 159.1 178.219.1

144.3 159.1 178.2AgencyTotalAppropriatedFunds 19.1



PersonalServices 89.0 88.6 101.813.2EREAmount 18.2 20.5 20.50.0Prof.AndOutsideServices 10.0 16.0 21.95.9TravelInState 1.0 1.5 1.50.0OtherOperatingExpenses 25.3 31.2 31.20.0Equipment 0.8 1.3 1.30.0




10AcupunctureBoardofExaminers FY2017ExecutiveBudget



AcupunctureBoardofExaminersFund 144.3 159.1 178.219.1



TheExecutiverecommendsalumpsumappropriationtotheagency.

AgencyOperatingDetail AcupunctureBoardofExaminers11

DepartmentofAdministrationTheDepartmentofAdministration(DOA)providesleadership,direction,andmanagementinformationandsupport;financialandprocurementsupportservices;facilityplanning,design,development,construction,operations,andmaintenance;employeeandretireehealthandbenefitsprograms;timely,customerdrivenhumanresourcesservices;businessenhancinginformationservicesfortheDepartment,stateagencies,andArizonacitizens;customerserviceforsmalllicensingagenciesingeneralaccountingandcentralizedofficesupport;distributionofsurplusstateandfederalpropertythroughasystemthatmaximizesthedollarreturnonpropertysold;clean,safe,andenvironmentallyfriendlyvehicles;anorderlyenvironmentwherevisitors,employees,andotherpersonsconductingbusinesswiththestatewillbesafeandsecure;andservicestoagencycustomersandthepublicforthestate'spropertyandliabilityexposuresaswellasforstateemployeecustomerswhohaveworkrelatedinjuries.TheAgencyhasthreegoals:(1)Tomaintainthecontinuityofstategovernmentoperationstoensurethesafeandefficientdeliveryofgovernmentservices,(2)Toattractandretainahighperformanceteamofemployees,and(3)Toaggressivelypursueinnovativesolutionsandopportunities.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITE http://www.azdoa.gov/Allnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary


NetChangeFY2017

GeneralFund 180,297.9 100,492.4 112,374.011,881.6OtherAppropriatedFunds 176,162.1 208,422.7 247,017.338,594.6NonAppropriatedFunds 1,027,750.0 1,030,965.6 1,058,648.827,683.2

1,384,210.0 1,339,880.7 1,418,040.1AgencyTotal 78,159.4


FY2017FY2016

6,731.9LargeAutomationProjects 0.0

31,526.3AutomationProjectsFundRevenue 0.0

4,244.3MajorBuildingRenovations 0.0

3,248.4StateInformationSecurityandPrivacyOffice 0.0

MajorExecutiveInitiativesandFundingRecommendationsAutomationProjectsNonLapsingAuthority

TheState'slargestinformationtechnologyandautomationprojectsexperienceinherentlyhighlevelsofcomplexitythatrequireextensiveplanning.Themoniesappropriatedtothoseprojectsareonetimeappropriations.Duetotheplanningrequired,theprojectscannotbecompletedwithinthecurrentfiscalyear.TheExecutiverecommendscontinuingappropriationauthorityforFY2017forthefollowinglargeautomationprojects:

FY2015DCSCHILDSReplacementFY2015DOCAIMSReplacement

12DepartmentofAdministration FY2017ExecutiveBudget

FY2015DOAAFISReplacementFY2016DOAAFISReplacementFY2016ADEAELASFY2016DOAASETInitiativesFY2016DESITSecurityFY2016DEQELicensing

FY2017Funding0.0AutomationProjectsFund

0.0IssueTotal

AgencyOperatingDetail DepartmentofAdministration13

LargeAutomationProjects

InFY2014,astatewideinformationtechnology(IT)planconsolidatedITprojects,centralizingoversightandprojectmanagementbytheArizonaStrategicEnterpriseTechologyOffice(ASET).TheplanfurtherstipulatedthatfundingfortheseprojectscomethroughtheAutomationProjectsFund.

Lastyear,$24.8millionwasappropriatedtotheAutomationProjectsFundforthefollowingnewandcontinuingprojects:

StateAccountingSystemReplacement(AFIS):DepartmentofAdministrationArizonaStrategicEnterpriseandTechnologyOffice(ASET)Initiatives:DepartmentofAdministrationInformationTechnologySecurity:DepartmentofEconomicSecurityELicensing:DepartmentofEnvironmentalQualityEducationLearningandAccountabilitySystem(ELAS):DepartmentofEducation

ForFY2017,theExecutiverecommends$31.5millionforthereplacementoftheInmateManagementSystem(AIMS),Children'sInformationLibraryandDataSource(CHILDS),ELAS,andDESsInformationTechnologySecurity.ItisalsorecommendedthattheseappropriationsnotlapseuntilJune30,2018.Thecurrentstatusofeachprojectisasfollows:

DOAAFISReplacement:TheaccountingsystemwentliveinJuly2015.FY2016wasthelastyearofprovidingappropriationstothisproject.TheExecutiverecommendsnoadditionalprojectfundingforFY2017.

DOAASETInitiatives:TheExecutiverecommendationforASETInitiativesrangefromfundingfortheimplementationofanetworkinfrastructureandsecuritycoreatIODataCenters,improvingStateagencywebsites,theprojectmanagementoffice,anITconsolidationassessment,andotherITgovernanceandstafftrainingprograms.

DESInformationTechnologySecurity:TheDepartmentofEconomicSecurityhasdevelopedafouryearplantocomplywithStateandfederalsecuritystandards.TheFY2017recommendationprovidesfundingforthesecondyearofthisfouryearplan.

DCSCHILDSSystem:CHILDSisthemanagementinformationsystemusedtodocumentthestatus,demographics,locationsandoutcomesforeverychildinthecareofDCS.ThisprojectisintherequirementsgatheringphaseandanticipatesbeginningtheprocurementprocessattheendofFY2016,forearlydevelopmenttobegininFY2017.

ADEELAS:ELASconsistsofseveralprojects,includingthecompletionofthenewstudentinformationdatabaseaswellasthecompletionofthenewschoolfinancepaymentsystem.TheExecutiverecommendationanticipatesFY2017willbethelastyearofappropriationstothisproject.

DOCAIMSReplacement:TheAIMSsystemwillprovideinmateidentification,movement,location,count,sentencinganddisciplinaryactionsinformation.TheprojecthascompletedtheprocurementphaseandbegundevelopmentinFY2016.TheExecutiverecommendationanticipatesthatFY2017willbethefinalyearofappropriationsforthisproject.

DEQELicensing:DEQisdevelopingawebportalthatwillenableitscustomerstoperformpermitting,billing,payments,anddatasubmissiononline.TheExecutiverecommendationanticipatesthatFY2016wasthefinalyearofappropriationsforthisproject.


FY2017Funding6,731.9AutomationProjectsFund

6,731.9IssueTotal

AutomationProjectsFundRevenue

TheExecutiverecommendsthat,inFY2017,moniesfromfundsatthefollowingagenciesbeappropriatedtotheAutomationProjectsFundtocarryoutITprojectsforthoseagencies:DepartmentofAdministration,DepartmentofEducation,DepartmentofCorrections,DepartmentofChildSafety,andDepartmentofEconomicSecurity.AllfundtotalsrepresentthetotalamountsappropriatedfromtheindividualfundstotheAutomationProjectsFundinFY2017.

FY2017Funding11,881.6GeneralFund

1,294.7SpecialAdministrationFund

1,000.0InmateStoreProceedsFund

2,050.0StateWebPortalFund

1,000.0PenitentiaryLandEarningsFund

1,000.0StateCharitable,Penal&ReformatoryLandEarningsFund

4,000.0DOCSpecialServicesFund

8,300.0AutomationOperationsFund

30,526.3IssueTotal


StateInformationSecurityandPrivacyOffice

Businessesandgovernmentagenciesacrossthecountryareconstantlyunderthreatofcyberattack.In2013,Targetconfirmedabreachofabout40millionrecordsandacostof$100milliontoupgradepaymentterminals.In2013,MaricopaCommunityCollegesufferedabreachof2.3millionrecordsatacostof$20millionthusfar.

TheStateofArizonaanditsagenciesareresponsibleforholdinghighlysensitiveinformation.Inprioryears,securityinitiativeshavebeenfundedthroughtheAutomationProjectsFund.AscyberthreatswillbeaconstantconcernfortheState,theExecutiverecommendsoperationalizingcybersecurityeffortsthroughtheexistingStateInformationSecurityandPrivacyOffice(SISPO),housedwithintheArizonaStrategicEnterpriseandTechnologyOffice(ASET).TheRecommendationprovidesatotalappropriationof$5milliontotheSISPOspeciallineitem.

FY2017Funding527.8InformationTechnologyFund

3,600.0StateWebPortalFund

(879.4)AutomationOperationsFund

3,248.4IssueTotal

MajorBuildingRenovation

InFY2017,itisexpectedthatthe1740W.AdamsSt.buildingwillbevacant.TheExecutiverecommendsarenovationofthislocation,fundedthrougharentincrease,atatotalcostof$4.2million.Therecommendedrentwillincreaseto$17.85perrentalsquarefoot,whichisapproximately90%ofthecurrentPhoenixareamarketrateforcomparableofficespace.Therentincreasewillgenerate$8.8million,ofwhich$5.3millionhasaGeneralFundimpact.

IthasbeendifficulttofindStateagencytenantsfortheScottsdalepropertiesat9535and9545EastDoubletreeRanchRoad,astheyare25milesfromtheCapitolMall.Asaresult,theDoubletreeRanchRoadpropertiesare60%vacant,anditisnotcosteffectiveforDOAtoheat,coolandprovidemaintenanceandmailroomservicestothosefacilities.

TheExecutiveproposesthatinFY2018,afterrenovationshavebeencompletedat1740W.Adams,tenantsintheDoubletreeRanchRoadbuildingsmovetothenewlyrenovatedbuilding.Additionally,theExecutiverecommendssellingtheDoubletreeRanchRoadbuilding,withproceedsdepositedintotheGeneralFund.ArecentassessmentvaluedtheDoubletreeRanchRoadpropertiesat$2.6million.

FY2017Funding4,244.3CapitalOutlayStabilizationFund

4,244.3IssueTotal


StateBoards'OfficeandCSBConsolidation

InJune2009,theStateBoardsOffice(SBO)andCentralServicesBureau(CSB)wereoperationallyconsolidated,withSBOcontinuingasaseparatebudgetunitinstatute.

SBOprovidestosmallStateagenciesadministrativeservicesthatincludereceptionandpersonnelservices.SBO'sbudgetisappropriated$215,800,fromtheSpecialServicesRevolvingFund,whichreceivesrevenuefromagencypaymentsforservices.

CSBcurrentlyservesmorethan50Stateagencies,providingaccounting,budgetingandfinancialservices.CSB'soperatingbudgetisabout$324,900,fundedthroughanonappropriatedInteragencyServiceAgreementFund,whichalsoreceivesrevenuefromagencypaymentsforservices.

TheExecutiverecommendsconsolidatingtheSBOandCSBbudgetsintotheDepartmentofAdministration.TheconsolidatedunitwillbecalledtheCentralServicesBureau.ThebudgetforthenewlyconsolidatedCSBwillbeentirelyappropriatedfromtheSpecialServicesRevolvingFund,eliminatingthemechanismoffundingoperationsfromthenonappropriatedInteragencyServiceAgreementFund.

Additionally,theExecutiverecommendsstatutorychangestoincludeaccountingservicesasaservicecoveredbytheSpecialServicesRevolvingFund.Finally,theExecutiverecommendsthatrevenuestoCSBaboveitsappropriationcouldbeappropriatedtoCSBuponreviewbytheJointLegislativeBudgetCommittee,allowingtheunittoalignstaffresourceswithnewcustomers.

FY2017Funding540.7SpecialServicesFund

540.7IssueTotal

GrantsandFederalResourcesOfficeFunding

TheOfficeofGrantsandFederalResources,housedwithinDOA,helpsStateagenciesfind,winandmanagegrants.TheStatecurrentlyreceivesabout$13.2billioninfederalfunds.Historically,theOfficeofGrantsandFederalResourceswasfundedthroughARRAmoneythatwillrunoutinFY2016.

IntheFY2016enactedbudget,$1millionwasappropriatedinaspeciallineitemtotheGovernmentTransformationOffice.TheoperatingbudgetoftheGovernmentTransformationOfficeisapproximately$600,000,leavingcapacityinthisspeciallineitemtofundtheOfficeofGrantsandFederalResources,whoseoperatingexpensesareapproximately$400,000.TheExecutiverecommendsamendingthe$1millionspeciallineitemfortheGovernmentTransformationOfficetoincludetheOfficeofGrantsandFederalResources.

FY2017Funding0.0GeneralFund

0.0IssueTotal


FleetManagementMaintenanceChargeIncrease

TheDepartmentofAdministration'sFleetManagementOffice(DOAFleet)managesover1,300vehiclesthatprovideservicestoapproximately135agencies,boardsandcommissions.MostofthevehiclesinDOAFleetareextendeddispatchvehiclesownedbyDOAFleetbuthousedwiththeusingagencyonadaytodaybasis.Extendeddispatchvehiclesusedbyagenciesarecharged$0.05permileformaintenance.The$0.05chargewassetin2002,whentheaverageageofDOAFleetvehicleswas3.5years.Today,theaveragevehicleis7.4yearsold;asaresult,DOAFleetisexperiencinghighermaintenancecoststhancanberecoveredthroughthe$0.05maintenancecharge.

Toalignmaintenancechargeswithactualcosts,theExecutiverecommendsincreasingthemaintenancefeeto$0.07permilefornewervehiclesandto$0.14permileforoldervehicles.ThisRecommendationdoesnotincludeanincreaseinappropriationtotheMotorPoolRevolvingFund;rather,itrecommendsthatfundingbeallocatedbyaffectedStateagencies.Theestimatedstatewideimpactofthisincreaseis$677,600,ofwhich$332,000wouldcomefromagenciesfundedbytheGeneralFund.

FY2017Funding0.0MotorPoolRevolvingFund

0.0IssueTotal

BaselineRecommendationsStateAgencyHealthInsurancePremiumReduction

BeginninginJanuary2016,healthinsurancepremiumsforStateemployeeswillbereduced.AgencysavingsfromthesereductionswereenactedintheFY2016budgettocapturesavingsfromJanuary2016throughJune2016.Tocapturetheremainingsavingsfortherestofcalendaryear2016(i.e.,thefirsthalfofFY2017),theExecutiverecommendsreductionstovariousStateagenciesbasedonexpectedsavingsfromthepremiumreduction.ThereductionforeachagencyisprovidedintheAllocationofStatewideAdjustmentssection.

FY2017Funding

0.0GeneralFund0.0IssueTotal

HiringFreezeandAgencyConsolidations

Savingsfrom(a)thehiringfreezethatbeganinFebruary2015and(b)threeagencyconsolidationsaretobeenactedinFY2017.ThesavingsassociatedwiththehiringfreezeforeachagencyaredetailedintheAllocationofStatewideAdjustmentssection.ThesavingsassociatedwiththeagencyconsolidationswillbeindicatedwithintheExecutiveRecommendationforeachagency.

Followingarethethreeagencyconsolidations:(1)BehavioralHealthServices,consolidatedintotheArizonaHealthCareCostContainmentSystem(AHCCCS)(2)DepartmentofWeightsandMeasures,intotheDepartmentofAgricultureandtheDepartmentofTransportation(3)BoardofAppraisal,intotheDepartmentofFinancialInstitutions

FY2017Funding



AccountingSystemMaintenanceandUpgradeCharges

InJuly2015,theStatesnewaccountingsystembecameoperational.InNovember2015,theGeneralAccountingOfficesigneda10yearagreementwiththesystemvendor,CGI,toprovidemaintenanceandupgrades.ThisagreementprovidestwokeybenefitstotheState:riskreductionandincreasedpredictabilityforoperatingandcapitalcosts.

Intheagreement,CGIassumesresponsibilityforthevastmajorityofinformationtechnologyfunctions,providingtechnologicalandserviceexpertise.CGIstechnicalsupportreducestheState'sexposuretostaffrecruitingandturnovercosts.Additionally,CGIwillprovidetothesystemhardwareandinfrastructureupdatesthatwouldotherwiseneedtobepaidseparatelybytheState.

TheExecutiverecommendsfundingthecostsoftheCGIagreement.TherevenuetotheAFISCollectionsFundcomesfromchargestoStateagenciesthroughafeepertransactioncharge.TheExecutiverecommendsincreasingthefeepertransactionchargetofundtheincreaseinappropriation,whichwillresultinaGeneralFundimpactof$454,400.

FY2017Funding

1,809.9ArizonaFinancialInformationSystemCollectionsFund1,809.9IssueTotal

AdjustInsuranceClaimsRelatedExpenditures

Eachyear,anindependentactuarypreparesastudyoftheState'sexposureandclaimshistoryforitsproperty,liabilityandworkers'compensationprograms.Perthefindingsofthemostrecentstudy,toalignappropriationswithactuarialprojections,theExecutiverecommendsanincreaseintheRiskManagementFundforthespecialfollowingspeciallineitems:RiskManagementLossesandPremiums,RiskManagementAdministrativeExpenses,andWorkers'CompensationLossesandPremiums.

FY2017Funding

3,199.7RiskManagementFund3,199.7IssueTotal

AnalogCommunicationServicesMaintenance

Analogcommunicationdevicesincludeemergencyphones,elevatorphones,andfireandalarmlinesatvariouslocationsontheCapitolMall.TheStatecurrentlyrelieson26yearoldbatteriesthatare16yearspasttheirusefullifetoprovidepowertothosedevicesincaseofinterruptions.

AccordingtotheAZNETIIcontract,inMarch2017CenturyLinkwillreplaceexistinganalogdeviceswithupdatedanalogdevices.ThoughCenturyLinkwillprovidetheanalogdevices,theStateisresponsibleforprovidinganuninterruptablepowersupply(UPS)tothosedevicesincaseofoutage.TheExecutiverecommendsaonetime$100,000appropriationfromtheTelecommunicationsFundtoprovideaUPSforthereplacedanalogdevices.

FY2017Funding

100.0TelecommunicationsFund100.0IssueTotal


CapitolMallFiberRepairandExpansion

Fiberinfrastructuredegradation,whichcausesnegativeimpactstonetwork,voiceanddataservicesforStateagencies,hasbeenidentifiedontheCapitolMall.Additionally,network,voiceanddataserviceswouldbeimprovedbyexpandingthefibertoreducesinglepointsoffailureinthenetwork.TheExecutiverecommendsaonetime$75,000appropriationfromtheTelecommunicationsFundfortherepairandexpansionoffibertoimprovenetworkavailabilitytotheCapitolMall.

FY2017Funding

75.0TelecommunicationsFund75.0IssueTotal


SupplementalRecommendationsFederalReimbursement

OneoftheDepartmentskeyfundingmechanismsconsistsofseveralenterprisefundsthatcollectmoniesforadministrativeandinfrastructureservicestoStateagenciesandotherentitiesthatbenefitfromthoseservices.Onekeypurchaserofthoseservicesisthefederalgovernment,whichenlistsstategovernmentsaspartnersthroughfederalfinancialparticipationinavarietyofprograms.Thefederalgovernmentholdsequitysharesinthefundingandmaintainsaclosewatchonexpendituresofthosefundsandmonitorsfordisalloweduses.FederalauditorshavenotifiedtheDepartmentthatcostactivitiesinseveralfundshavebeendisallowed,andtheStateislikelytoberequiredtoreimbursethedisallowedcostsinFY2016.TheExecutiverecommendsanonlapsingsupplementalappropriationforsettlementauthorityof$7.7millionfromtheRiskManagementFundand$20.0millionfromtheSpecialEmployeeHealthInsuranceTrustFundforfederalreimbursementsthatmaybedueinFY2016.

FY2016Funding

19,960.0SpecialEmployeeHealthFund7,659.7RiskManagementFund

27,619.7IssueTotal

GrantsandFederalResourcesOfficeFunding

TheOfficeofGrantsandFederalResources,housedwithinDOA,helpsStateagenciesfind,winandmanagegrants.TheStatecurrentlyreceivesabout$13.2billioninfederalfunds.Historically,theOfficeofGrantsandFederalResourceswasfundedthroughARRAmoneythatwillrunoutinFY2016.

IntheFY2016enactedbudget,$1millionwasappropriatedinaspeciallineitemtotheGovernmentTransformationOffice.TheoperatingbudgetoftheGovernmentTransformationOfficeisapproximately$600,000,leavingcapacityinthisspeciallineitemtofundtheOfficeofGrantsandFederalResources,whoseoperatingexpensesareapproximately$400,000.TheExecutiverecommendsamendingthe$1millionspeciallineitemfortheGovernmentTransformationOfficetoincludetheOfficeofGrantsandFederalResources.

FY2016Funding



PerformanceMeasures


Customersatisfactionwithadministrationofpayrollprocess 7.73 6.82 6.0 6.0Customersatisfactionwithtenantimprovementprocess 6.0 5.68 6.5 6.5Customersatisfactionwithvoicetelecommunicationsservices 6.18 6.26 6.7 6.7Percentageofenterpriseapplicationdevelopmentworkcompletedwithinnegotiatedtimeframe

N/A N/A N/A N/A

Customersatisfactionwithinformationanddatasecurityservices 6.59 6.32 6.5 6.5Statewideincidentrateper100FullTimeEquivalent(FTE)positions(acceptedRiskManagementclaims)

4.0 3.8 4.0 4.0

Customersatisfactionwithbenefitplans 6.6 6.84 7.0 7.0Customersatisfactionwithmainframeprocessing 6.23 6.29 7.0 7.0PercentageofADOA'sserviceswithaminimumcustomersatisfactionratingof6.0

75.5 0 0 0

Customersatisfactionwithbuildingmaintenance 5.9 5.85 6.5 6.5Linktothe AGENCY'SSTRATEGICPLAN

0100200300400500600700800900


FilledEmployeePositions




Administration 3,042.5 4,426.6 4,967.3540.7ArizonaStrategicEnterpriseTechnologyOffice

71,367.4 58,092.0 98,773.640,681.6

BenefitsDivision 4,094.8 5,262.3 5,262.30.0FinancialServices 163,051.9 101,864.3 103,674.21,809.9GeneralServicesDivision 28,230.2 32,483.1 36,727.44,244.3HumanResources 13,242.8 13,812.4 13,812.40.0RiskManagement 72,353.4 92,022.9 95,222.63,199.7StateProcurementOffice 1,077.0 951.5 951.50.0

356,460.0 308,915.1 359,391.3AgencyTotalAppropriatedFunds 50,476.2




PersonalServices 29,867.7 34,964.7 34,789.6(175.1)EREAmount 11,459.5 13,794.0 13,606.0(188.0)Prof.AndOutsideServices 34,398.5 40,944.2 42,505.21,561.0TravelInState 207.7 228.6 231.02.4TravelOutofState 25.0 29.0 29.00.0AidtoOthers 74,002.3 6,000.5 6,000.50.0OtherOperatingExpenses 173,300.8 193,142.3 196,669.63,527.3Equipment 3,504.3 6,784.3 9,589.42,805.1CapitalOutlay 671.8 0.0 4,244.34,244.3DebtService 0.0 0.0 0.00.0CostAllocation (100.3) 72.1 5.1(67.0)TransfersOut 29,122.8 12,955.4 51,721.638,766.2




GeneralFund 180,297.9 100,492.4 112,374.011,881.6AdminSurplusProperty/FederalFund 51.2 464.6 464.60.0AirQualityFund 577.4 927.3 927.30.0ArizonaFinancialInformationSystemCollectionsFund

0.0 7,567.8 9,377.71,809.9

AutomationOperationsFund 21,251.4 23,964.1 31,384.77,420.6AutomationProjectsFund 30,520.9 24,794.4 31,526.36,731.9CapitalOutlayStabilizationFund 15,902.9 18,082.8 22,327.14,244.3CorrectionsFund 352.7 571.2 571.20.0DOCSpecialServicesFund 0.0 0.0 4,000.04,000.0InformationTechnologyFund 2,791.6 2,942.1 3,469.9527.8InmateStoreProceedsFund 0.0 0.0 1,000.01,000.0MotorPoolRevolvingFund 7,123.1 10,148.8 10,148.80.0PenitentiaryLandEarningsFund 0.0 0.0 1,000.01,000.0PersonnelDivisionFund 12,665.4 12,885.1 12,885.10.0RiskManagementFund 72,353.4 92,022.9 95,222.63,199.7SpecialAdministrationFund 0.0 0.0 1,294.71,294.7SpecialEmployeeHealthFund 4,094.8 5,262.3 5,262.30.0SpecialServicesFund 0.0 0.0 540.7540.7StateCharitable,Penal&ReformatoryLandEarningsFund

0.0 0.0 1,000.01,000.0

StateSurplusPropertyFund 2,770.0 2,397.9 2,397.90.0StateWebPortalFund 3,940.8 4,543.0 10,193.05,650.0TelecommunicationsFund 1,766.6 1,848.4 2,023.4175.0




SpecialLineAppropriations


NetChangeFY2017

ADEStudentDatabase 11,661.9 7,000.0 7,300.0300.0AFISReplacement 8,342.6 2,383.0 0.0(2,383.0)AppropriationsforNamedClaimants 184.6 0.0 0.00.0ArizonaFinancialInformationSystem 0.0 7,567.8 9,377.71,809.9CountyAttorneyImmigrationEnforcement 231.4 0.0 0.00.0CountyServices 7,650.5 6,000.5 6,000.50.0DEQElisencing 4,933.4 5,000.0 0.0(5,000.0)DESCHILDSDatabase 0.0 0.0 4,581.60.0DOADataCenter 2,460.9 2,625.0 5,700.03,075.0DOCInmateDatabase 0.0 0.0 8,000.00.0DORTobaccoTaxAccounting 1,000.0 0.0 0.00.0EGovernmentProjects 0.0 1,075.0 1,300.0225.0EnhancingStatewideDataSecurity 937.1 3,125.0 0.0(3,125.0)EnterpriseArchitecture 69.2 500.0 1,850.01,350.0EstablishCSFSandDESDataCenter 11,096.1 936.4 1,294.7358.3FederalTransferPayment 4,798.6 0.0 0.00.0GovernmentTransformationOffice 0.0 1,000.0 1,000.00.0IncomeTaxData 566.7 0.0 0.00.0ProjectManagement 543.3 2,150.0 1,500.0(650.0)RiskManagementAdministrativeExpenses 3,757.5 8,747.2 9,816.51,069.3RiskManagementLosses 31,368.8 44,362.2 45,372.71,010.5SouthwestDefenseContracts 25.0 25.0 25.00.0StateBuildingsDebtService 84,123.7 84,114.6 84,114.60.0StateSurplusPropertySalesProceeds 1,761.1 1,260.0 1,260.00.0StatewideInformationSecurityandPrivacyOffice

735.6 872.2 5,000.04,127.8

Utilities 7,026.5 8,275.6 8,275.60.0WebPortalTransitionCosts 5.9 0.0 0.00.0WorkersCompensationLosses 25,604.3 31,159.2 32,279.11,119.9



NonAppropriatedFundsExpenditures


NetChangeFY2017

2010ALotteryRevenueBondDebtService 33,749.1 37,501.7 37,501.4(0.3)AdminAFISIICollections 2,138.5 0.0 0.00.0AdminSpecialServicesFund 891.5 881.1 881.10.0ADOASpecialEventsFund 24.6 24.4 24.40.0ARCOREnterprisesRevolving 0.0 0.0 1,000.00.0CertificateofParticipation 111,653.4 115,223.1 121,333.06,109.9ConstructionInsuranceFund 8,926.3 3,447.4 4,907.81,460.4CoopStatePurchasing 4,484.9 3,196.1 3,196.10.0CreditCardIncentivesandRebateClearingFund

26.7 0.0 0.00.0

DOA911EmergencyTelecommunicationServiceRevolving

18,926.4 20,490.0 19,479.6(1,010.4)

ERE/BenefitsAdministration 35,793.0 32,573.0 32,441.8(131.2)FederalEconomicRecoveryFund 932.1 1,099.5 0.0(1,099.5)FederalGrant 2,778.7 7,666.6 7,666.60.0IGAandISAFund 8,423.1 8,170.7 7,845.8(324.9)OilOverchargeFund 0.0 104.2 104.20.0PayrollAdministrationFund 158.8 143.1 143.10.0PLTO 9,915.6 1,738.3 0.0(1,738.3)RetireeAccumulatedSickLeave 12,266.5 13,753.4 13,753.40.0SpecialEmployeeHealth 775,847.2 781,986.5 806,958.324,971.8StateEmployeeRideShare 481.2 535.0 535.00.0StatewideDonations 30.8 857.2 857.20.0StimulusStatewideAdminFund 301.7 20.0 20.00.0

1,027,750.0 1,029,411.3 1,058,648.8AgencyTotalNonAppropriatedFunds 28,237.5

CLICKONFUNDNAMEFORTHEFUND'SSOURCESANDUSESREPORT

FederalFundsExpenditures

Actual Exp.Plan Exp.PlanFY2015 FY2016 FY2017

3,727.4 7,722.2 6,279.7AgencyTotal

Linktothe AGENCY'SSECTIONOFTHEFEDERALFUNDSREPORT

ThesearetheFederalExpendituresreportedbytheagenciesand,inmostcases,areincludedintheAppropriatedorNonAppropriatedFundsexpenditureslistedabove.

TheExecutiverecommendsalumpsumappropriationbyfundwithspeciallines.


OfficeofAdministrativeHearingsTheOfficeisthemainvenueforadministrativelawhearingsinArizona,inwhichAdministrativeLawJudgespresideovercontestedcases.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITE http://azoah.com/Allnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary


NetChangeFY2017

GeneralFund 862.5 861.7 861.70.0OtherAppropriatedFunds 0.0 12.3 0.0(12.3)NonAppropriatedFunds 885.9 749.5 749.50.0

1,748.4 1,623.5 1,611.2AgencyTotal (12.3)

MajorExecutiveInitiativesandFundingRecommendationsHealthcareGroupFundElimination

TheOfficehasbeenreceivingappropriationsfromtheHealthcareGroupFund,whichhasbeeneliminated.TheExecutiverecommendsareductioninFY2017toreflecttheeliminationoftheHealthcareGroupFund.

FY2017Funding(12.3)HealthcareGroupFund

(12.3)IssueTotal


SupplementalRecommendationsHealthcareGroupFundElimination

TheExecutiverecommendsareductionintheOffice'sFY2016appropriationfromtheHealthcareGroupFund,whichhasbeeneliminated.

FY2016Funding

(12.3)HealthcareGroupFund(12.3)IssueTotal

AgencyOperatingDetail OfficeofAdministrativeHearings25

PerformanceMeasures


Percentofevaluationsratingtheadministrativelawjudgeexcellentorgoodinimpartiality

92.04 90.36 90.36 90.36

Averagedaysfromrequestforhearingtofirstdateofhearing 55.16 49.51 49.51 49.51Averagenumberofdaysfromtheconclusionofthehearingtotransmissionofthedecisiontotheagency

9.41 11.17 11.17 11.17

Numberofhearingsheld 2,630 1,421 1,421 1,421Linktothe AGENCY'SSTRATEGICPLAN

01,0002,0003,0004,0005,0006,0007,0008,0009,000


TotalCases

AgencyExpenditures

0500

1,0001,5002,0002,5003,000


Al l Funds GF

(in$1,000s)




Hearings 862.5 874.0 861.7(12.3)

862.5 874.0 861.7AgencyTotalAppropriatedFunds (12.3)



26OfficeofAdministrativeHearings FY2017ExecutiveBudget



PersonalServices 564.6 564.6 564.60.0EREAmount 206.4 206.4 206.40.0OtherOperatingExpenses 91.5 103.0 90.7(12.3)




GeneralFund 862.5 861.7 861.70.0HealthcareGroupFund 0.0 12.3 0.0(12.3)





NetChangeFY2017

IGAandISAFund 885.9 749.5 749.50.0

885.9 749.5 749.5AgencyTotalNonAppropriatedFunds 0.0


AgencyOperatingDetail OfficeofAdministrativeHearings27

AfricanAmericanAffairsTheCommissionofAfricanAmericanAffairsadvisesstateandfederalagenciesonpolicies,legislationandrulesthataffecttheAfricanAmericanCommunity.TheCommissiondevelops,reviewsandrecommendspoliciesthataffecttheareasofhealthandhumanservices,housing,education,employment,businessformationanddevelopment,publicaccommodationsandcontractingandprocedurestoensurethatprogramsaffectingAfricanAmericansareeffectivelyimplementedwithinputfrommembersoftheAfricanAmericancommunity.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITEAllnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary


NetChangeFY2017

GeneralFund 40.4 125.0 125.00.0

40.4 125.0 125.0AgencyTotal 0.0





AfricanAmericanAffairsCommission 40.4 125.0 125.00.0




PersonalServices 30.2 68.3 68.30.0EREAmount 5.1 27.3 27.30.0TravelInState 0.0 2.0 2.00.0TravelOutofState 0.0 2.0 2.00.0OtherOperatingExpenses 5.1 25.4 25.40.0




GeneralFund 40.4 125.0 125.00.0



28AfricanAmericanAffairs FY2017ExecutiveBudget

DepartmentofAgricultureTheArizonaDepartmentofAgriculture,oftenincooperationwithFederalentities,regulatesfacetsoftheagricultureindustrytopromotethegeneralwelfareoftheagriculturalcommunity,informconsumers,andprotectpublichealthandsafety.TheDepartmentconductsfoodqualityandsafetyinspectionsofmeat,dairy,vegetable,citrus,fruit,andeggproducts;registers,licensesandsamplesfeed,fertilizer,seedandpesticidecompaniesorproducts;regulatesagriculturalpesticideuse;trainsandcertifiespesticideapplicators;protectsnativeplant;guardsagainsttherisksassociatedwiththeentry,establishmentandspreadofplantpests,diseasesandnoxiousweeds;licensesproducepackers,dealersandshippers;provideseducationonpesticidesafetyandairquality;providesforensic,productquality,foodsafetyandotheragriculturallaboratoryanalysis,identification,certificationandtrainingservices;andprovidesadministrativesupportforthecitrus,lettuceandgraincommoditycouncilsandtheAgriculturalEmploymentRelationsBoard.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITE http://www.azda.gov/Allnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary


NetChangeFY2017

GeneralFund 8,252.2 8,287.4 9,219.6932.2OtherAppropriatedFunds 0.0 0.0 1,439.81,439.8NonAppropriatedFunds 14,492.6 17,321.2 16,719.7(601.5)

22,744.7 25,608.6 27,379.1AgencyTotal 1,770.5


FY2017FY2016

2,372.0DepartmentofWeightsandMeasuresTransfer 0.0

BaselineRecommendationsDepartmentofWeightsandMeasuresTransfer

InaccordancewithLaws2015,Chapter244,theExecutiverecommendsthefunctionsoftheDepartmentofWeightsandMeasuresbetransferedtotheDepartmentofAgriculture;exceptforthedutiesofinvestigatingmovingtruckviolations,andlicensureandinvestigationsofliveryandvehicleforhireproviders.ThosefunctionsarerecommendedfortransfertotheDepartmentsofPublicSafetyandTransportation,respectively.TransferringthemajorityoffunctionstotheDepartmentofAgricultureisexpectedtosavetheGeneralFundapproximately$330,600eachyear.

Additionally,theExecutiverecommendstransferring$1,439,800fromtheWeightsandMeasuresAirQualityFundappropriationtotheDepartmentofAgriculture.

FY2017Funding

932.2GeneralFund1,439.8AirQualityFund2,372.0IssueTotal

AgencyOperatingDetail DepartmentofAgriculture29


PerformanceMeasures


Percentofmeatandpoultryproducttestsincompliancewithbacteria,drugandchemicalresiduerequirements

99 99.8 100 100

Numberofpestinterceptionswithinthestateinterior 5,672 6,993 7,000 7,000Linktothe AGENCY'SSTRATEGICPLAN

0

20,000

40,000

60,000

80,000

100,000

120,000


Licenses,PermitsIssued

AgencyExpenditures

05,000

10,00015,00020,00025,00030,00035,000


Al l Funds GF

(in$1,000s)




AdministrativeServices 1,141.5 1,134.4 1,134.40.0AgriculturalConsultationandTraining 264.9 267.7 267.70.0AnimalDisease,OwnershipandWelfareProtection

1,957.9 1,991.4 1,991.40.0

FoodSafetyandQualityAssurance 1,314.5 1,320.9 1,320.90.0

30DepartmentofAgriculture FY2017ExecutiveBudget



PestExclusionandManagement 2,507.1 2,518.4 2,518.40.0PesticideComplianceandWorkersafety 132.6 116.2 116.20.0StateAgriculturalLaboratory 933.7 938.4 938.40.0WeightsandMeasures 0.0 0.0 2,372.02,372.0




PersonalServices 4,282.9 4,521.9 5,635.71,113.8EREAmount 1,954.9 2,020.9 2,563.2542.3Prof.AndOutsideServices 125.4 107.0 300.5193.5TravelInState 448.9 488.4 603.4115.0TravelOutofState 15.1 21.2 34.012.8OtherOperatingExpenses 1,023.9 921.1 1,234.4313.3Equipment 202.7 8.5 89.881.3TransfersOut 198.4 198.4 198.40.0




GeneralFund 8,252.2 8,287.4 9,219.6932.2AirQualityFund 0.0 0.0 1,439.81,439.8



SpecialLineAppropriations


NetChangeFY2017

AgriculturalConsultationandTrainingPariMutuel

128.0 128.5 128.50.0

AgriculturalEmploymentRelationsBoard 23.3 23.3 23.30.0AnimalDamageControl 65.0 65.0 65.00.0RedImportedFireAnt 23.2 23.2 23.20.0


AgencyOperatingDetail DepartmentofAgriculture31



NetChangeFY2017

AgriculturalConsulting/TrainingProgramFund

0.0 1.7 1.70.0

AgricultureAdministrativeSupport 37.4 39.2 39.20.0AgricultureCommercialFeed 247.5 252.3 270.718.4AgricultureDangerousPlants 62.6 97.5 97.50.0AgricultureDesignated/DonationsFund 482.1 781.7 811.029.3AgricultureSeedLaw 53.6 53.5 59.25.7AquacultureFund 0.0 6.2 6.20.0ArizonaFederal/StateInspectionFund 2,823.5 3,013.8 3,193.5179.7AZCitrusResearchCouncil 14.8 66.8 60.8(6.0)AZIcebergLettuceResearchFund 89.2 100.0 100.00.0AZProtectedNativePlant 57.5 82.0 92.910.9BeefCouncilFund 258.1 258.0 258.00.0Citrus,Fruit,&VegetableRevolving 326.8 370.4 388.918.5CommodityPromotionFund 8.0 8.0 8.00.0CottonResearchandProtectionCouncilFund

2,671.4 3,093.0 3,093.00.0

EggInspectionFund 1,300.1 1,408.3 1,708.4300.1FederalGrant 4,117.0 4,152.0 4,152.00.0FertilizerMaterialsFund 302.4 340.3 354.414.1GrainCouncil 116.9 155.1 155.10.0IGAandISABetweenStateAgencies 104.1 104.1 104.10.0IndirectCostRecoveryFund 24.8 229.6 229.60.0LeafyGreenMarketingCommittee 454.6 569.4 569.40.0LivestockandCropConservationFund 415.7 1,274.4 75.9(1,198.5)LivestockCustodyFund 59.2 220.0 220.00.0NuclearEmergencyManagementFund 191.6 198.4 198.40.0PesticideFund 273.7 445.5 471.826.3

14,492.6 17,321.2 16,719.7AgencyTotalNonAppropriatedFunds (601.5)


FederalFundsExpenditures

Actual Exp.Plan Exp.PlanFY2015 FY2016 FY2017

4,126.4 4,152.0 4,152.0AgencyTotal

Linktothe AGENCY'SSECTIONOFTHEFEDERALFUNDSREPORT

ThesearetheFederalExpendituresreportedbytheagenciesand,inmostcases,areincludedintheAppropriatedorNonAppropriatedFundsexpenditureslistedabove.

TheExecutiverecommendsalumpsumappropriationtotheagencywithspeciallines.

32DepartmentofAgriculture FY2017ExecutiveBudget

ArizonaHealthCareCostContainmentSystemArizonaHealthCareCostContainmentSystem(AHCCCS),theState'sMedicaidAgency,usesfederal,stateandcountyfundstoprovidehealthcarecoveragetotheState'sacuteandlongtermcareMedicaidpopulationandlowincomegroups.Since1982,whenitbecamethefirststatewideMedicaidmanagedcaresysteminthenation,AHCCCShasoperatedinaccordancewithafederalResearchandDemonstrationWaiverthatallowsforatotalmanagedcaremodelofservicedelivery.

Unlikeprogramsinotherstates,thatrelysolelyonfeeforservicereimbursement,AHCCCSmakesprospectivecapitationpaymentstocontractedhealthplansresponsibleforthedeliveryofcare.Theresultisamanagedcaresystemthatmainstreamsrecipients,allowsthemtoselecttheirproviders,andencouragesqualitycosteffectivecareandpreventiveservices.

TheAHCCCSAdministrationisresponsibleforplanning,developing,implementing,andadministeringthehealthcareprogramsforlowincomeArizonans.Specifically,theAHCCCSAdministrationprovidesdirectionandoversightofoperationsrelatedtoeligibility,enrollment,qualityofcare,contractedhealthplansandproviders,andprocurementofcontractedservices.

AHCCCSoverseesthreemainprograms:

AHCCCSAcuteCareThemajorityofAcuteCareProgramrecipientsarechildrenandpregnantwomenwhoqualifyforthefederalMedicaidProgram(TitleXIX).AlthoughmostareenrolledinAHCCCScontractedhealthplans,AmericanIndiansandAlaskaNativesintheAcuteCareProgrammaychoosetoreceiveservicesthrougheitherthecontractedhealthplansortheAmericanIndianHealthProgram.AHCCCSalsoadministersanemergencyservicesonlyprogramforindividualswho,exceptforimmigrationstatus,wouldqualifyforfullAHCCCSbenefits.

ALTCSTheArizonaLongTermCareSystem(ALTCS)providesacutecare,behavioralhealthservices,longtermcare,andcasemanagementtoindividualswhoareelderly,physicallydisabled,ordevelopmentallydisabledandmeetthecriteriaforinstitutionalization.WhereasALTCSmembersaccountforlessthan4.0%oftheAHCCCSpopulation,theyaccountforapproximately26.0%ofthecosts.TheALTCSprogramencouragesdeliveryofcareinalternativeresidentialsettings.AsintheAcuteCareProgram,elderlyphysicallydisabledanddevelopmentallydisabledmembersofallagesreceivecarethroughcontractedplanscalledprogramcontractors.

KidsCareTheChildrensHealthInsuranceProgram(CHIP),referredtoasKidsCare,offersaffordableinsurancecoverageforlowincomefamilies.Childrenunderage19mayqualifyfortheprogramiftheirfamilysincomeexceedsthelimitallowedforMedicaideligibility,butisbelow200%oftheFederalPovertyLevel(FPL).WiththeexceptionofAmericanIndians,whoareexemptinaccordancewithfederallaw,parentspayamonthlypremiumbasedonincome.AswiththeMedicaidAcuteCareProgram,AmericanIndianandAlaskaNativechildrenmayelecttoreceivecarethroughanAHCCCScontractedhealthplanortheAmericanIndianHealthProgram.ThemajorityofchildrenenrolledinKidsCare,however,areenrolledinAHCCCShealthplansandreceivethesameservicesavailabletochildrenintheMedicaidAcuteCareProgram.EnrollmentintheKidsCareProgramwasfrozenasofJanuary1,2010.

Majormedicalprogramsincludeacutecare,longtermcare,andbehavioralhealthservices.TheAHCCCSAdministrationdetermineseligibilityfortheArizonaLongTermCareSystem(ALTCS),Children'sHealthInsuranceProgram(KidsCare),QualifiedMedicareBeneficiaries,andotherSupplementalSecurityIncome(SSI)relatedMedicalAssistanceOnlyprograms.FederalfundingthroughTitleXIXandTitleXXIoftheSocialSecurity

AgencyOperatingDetail ArizonaHealthCareCostContainmentSystem33

ActisprovidedtoAHCCCSbytheCentersforMedicareandMedicaidServices(CMS),afederalagencywithintheU.S.DepartmentofHealthandHumanServices.Linktothe AGENCY'SSTRATEGICPLANLinktothe AGENCY'SWEBSITE http://www.azahcccs.gov/Allnumbersrepresentingdollarsareexpressedinthousands.

AgencyBudgetSummary


NetChangeFY2017

GeneralFund 1,155,737.2 1,205,162.3 1,754,888.4549,726.1OtherAppropriatedFunds 141,362.7 143,447.5 214,186.970,739.4NonAppropriatedFunds 9,610,331.8 9,808,027.4 10,969,914.81,161,887.4

10,907,431.7 11,156,637.2 12,938,990.1AgencyTotal 1,782,352.9


FY2017FY2016

1,359.0ALTCSAdultDental 0.0

107.3FraudPreventionandCollections 0.0

743.9ITSecurityandPerformance 0.0

MajorExecutiveInitiativesandFundingRecommendationsALTCSAdultDental

TheArizonaLongTermCareSystem(ALTCS)isasinglefederallydefinedprogramprovidingservicesthroughtwoStateagencies:AHCCCS,whichservestheelderlyandphysicallydisabled,andtheDepartmentofEconomicSecurity(DES)whichservesthedevelopmentallydisabled.

InFY2008,theLegislatureexpandedpreventivedentalservices,uptoanannuallimitof$1,000permember,toincludeallALTCSadults.However,thisbenefitwaseliminatedinFY2009tohelpaddressbudgetshortfallsduringtherecession.Currently,whilechildrenonAHCCCShavepreventivedentalcarebenefits,adultAHCCCSmembersreceiveonlyemergencydentalservices.

Intheabsenceofpreventivedentalcare,elderlyanddisabledpeoplefaceheightenedhealthrisks,includingperiodontaldisease,pneumoniaandworseningdiabeticconditions.Toaddresstheserisks,theExecutiverecommends$1.4millionintheAHCCCSbudgettorestorepreventivedentalservicestoallelderlyandphysicallydisabledALTCSadults,uptoanannualmaximumof$1,000.

IntheDESbudgettheExecutiverecommends$1.2millionGeneralFundforpreventivedentalbenefitsfordevelopmentallydisabledALTCSpatients.Thus,statewide,theproposaltorestorepreventivedentalservicestoALTCSadultstotals$2.6millionGeneralFund.

FY2017Funding1,359.0GeneralFund

1,359.0IssueTotal

34ArizonaHealthCareCostContainmentSystem FY2017ExecutiveBudget

FraudPreventionandDebtCollections

TheAHCCCSOfficeoftheInspectorGeneral(OIG)isresponsibleforconductingcriminalinvestigationsandinvestigativeauditsforallAHCCCSprogramsinvolvingStateand/orfederaltaxdollars.OIGisadesignatedcriminaljusticeagencyandworkscloselywithfederal,Stateandlocallawenforcementoncasesinwhichproviders,subcontractors,membersandemployeescouldbeinvolvedinfraudulentactivity.

Inresponsetooneoftherecommendationsofthe2012auditorgeneralAHCCCSSunsetAudit,theExecutiverecommendsanadditional3.0FTEpositionsinOIGtocreateacollectionsunitandtoreviewhealthproviderrecords.Thecollectionsunitwillfocusoncollectingthe$15millioninoutstandinglegalsettlementawardsthatareduetoAHCCCS,whileauditinghealthproviderswillensurethatprovidersareproperlyandaccuratelybillingArizonasMedicaidprogram.

Inadditiontothefinancialsavings,arobustOIGensurescontinuedconfidenceintheintegrityoftheMedicaidprogram.Tocontinuetoadvancethisgoal,theExecutiverecommendsanadditional$214,600intotalfundappropriationtofundtheaforementioned3.0FTEpositions.AsAHCCCSreceivesa50%federalmatchfortheseadministrativefunctions,thisrecommendationincludes$107,300infederalfundsand$107,300GeneralFund.


107.3IssueTotal

ITSecurityandPerformance

TheITsystemsatAHCCCSincluderecordsforanestimatedfivemillioncurrentandformerenrollees.Toprotectcurrentandformermembers'personalinformation,inrecentyearsAHCCCShasimplementedaseriesofsecuritytoolstosignificantlyimproveitssecurityenvironment.

Tofurtherthiseffort,theExecutiverecommends$280,600GeneralFundand2.0FTEpositionstoprovideforathirdpartyconsultanttoconductanexternalreviewofsecurityvulnerabilitieswithinAHCCCSandtoaugmenttheagency'sITsecurityresources.Currently,ittakesuptoamonthtoreviewandaddressissuesdiscoveredinregularsecurityscans.Thisrecommendationwillallowstafftouseautomatedtoolstotrackandrespondtothreatsinrealtime.

Additionally,theExecutiverecommends$463,300and2.0FTEpositionstoimplementtoolstoidentifyandresolveITsystemperformanceissuesandcoordinatetheagency'sITassetstoensurecompliancewithvendors'licensingrequirements.Withtheproposedperformancemanagementsoftware,networkissuesthatcurrentlytakeadaytotroubleshootandresolvewillbeidentifiednearlyinstantaneouslysostaffcanresolvethemwithinthehour.Fasterproblemresolutionmeanslesssystemdowntimeandgreaterstaffproductivity.

TheExecutiverecommendsatotalof4.0FTEpositionsand$743,900GeneralFundmatchedwith$743,900infederalfundstoimprovethesecuritypostureoftheAHCCCSITsystems,implementsystemperformanceenhancementtools,andsystematicallycoordinateITassets.


743.9IssueTotal


BaselineRecommendationsBHSBaseModificationAppropriationTransfer

Laws2015,Chapter19(AgencyConsolidationBudgetReconciliationBill)requiresthetransferoffundingandmanagementforthebehavioralhealthservicesprogramfromtheDepartmentofHealthServices(DHS)toAHCCCS,effectiveJuly1,2016.Toimplementthistransfer,theExecutiverecommendsanincreaseintheAHCCCSbudgetandacorrespondingreductionintheDHSbudget.

FY2017Funding

517,304.7GeneralFund34,767.0TobaccoTaxandHealthCareFund2,250.2SubstanceAbuseServicesFund

554,321.9IssueTotal

BHSAdministrativeSavings

InthetransferofthebehavioralhealthservicesprogramfromDHStoAHCCCS,asenactedinthe2015AgencyConsolidationBudgetReconciliationBillandimplementedintheExecutiveRecommendation,theExecutiveestimatesGeneralFundsavingsof($607,500)throughtheconsolidationofduplicateadministrativefunctions.

FY2017Funding

(607.5)GeneralFund(607.5)IssueTotal


AcuteandALTCSCaseloadGrowth

TheExecutiverecommendsa$6.7millionincreaseintheAHCCCSGeneralFundappropriationforcaseloadchangesintheacuteandlongtermcaresystem(ALTCS)programs.Thisforecastincludesincreasesincaseloadsandcapitationrates,aswellasreductionsduetoincreasesinthefederalshareofMedicaidcosts.

InthefirsthalfofStateFiscalYear2016,caseloadsforthenonProposition204populations,whicharesupportedbytheGeneralFund,havegrownmorequicklythanoriginallyforecastintheFY2016budget.WhiletheExecutiveforecaststhatthisgrowthwillendinthesecondhalfofFY2016,thelargerbaselineMedicaidenrollmentwillnecessitateincreasedGeneralFundappropriationsinFY2017.

TheExecutiveestimatesthatcapitationrategrowthwillincreaseby1.5%incontractyear2017over2016.TheExecutiveisnotproposinganincreaseinproviderratesbut,basedonrecenthistory,forecaststhatmemberutilizationgrowthatcurrentproviderrateswillrequirethe1.5%increaseincapitationrates.

TheFederalMedicaidAssistancePercentage(FMAP)regularmatchrategrowsfrom68.92%infederalFiscalYear2016to69.24%inFFY2017.AstheStateisobligatedtopaythenonfederalshare,thisFMAPincreasewillreducetheamountofneededGeneralFundmatch.

Thefederalsharehasalsogrownduetothefederalgovernment'sapprovalofahigherTitleXXIFMAPtobeappliedtothepopulationreferredtoasexpansionchildren(i.e.,childreninhouseholdsearningfrom100%to133%ofthefederalpovertylevel).TheTitleXXIFMAPwasincreasedto100%forthreeyears,beginningOctober1,2015,bytheAffordableCareAct.ThefederalgovernmenthasalsoincreasedArizonasfederalTitleXXIallotmentfrom$80.7millioninFY2015to$122.5millioninFY2016,whichtheExecutiveforecastswillcontinuethroughtheforecastingperiod.

AsTobaccoTaxrevenuesareusedtooffsetGeneralFundobligations,TobaccoTaxrevenuesthatarehigherthantheamountsusedtodeveloptheFY2016appropriationallowfora($10,641,200)decreaseintheGeneralFundrecommendation.ThosefundsincludetheappropriatedTobaccoTaxandHealthCareFundandtheTobaccoProductsTaxFund,whichareincludedintherecommendation,aswellasanadditional$3millionfromthenonappropriatedProposition204ProtectionFund.

Similarly,thePrescriptionDrugRebate(PDR)fundoffsetstheGeneralFundwithrebatescollectedfrompharmaceuticalfirmsfordrugspaidforbyAHCCCS.ArizonasPDRfundhasbeencollectingmorerevenuethanwasappropriatedfromtheFund,enablinga$30.9millionincreaseinthePDRFundappropriationinFY2017andacorrespondingdecreaseintheAHCCCSGeneralFundappropriation.

FY2017Funding

6,714.2GeneralFund6,252.4TobaccoTaxandHealthCareFund1,415.8TobaccoProductsTaxFund(5,783.4)Children'sHealthInsuranceProgramFund

114.1BudgetNeutralityComplianceFund30,924.5PrescriptionDrugRebateFund39,637.6IssueTotal


BHSCaseloadGrowth

BeginningJuly1,2016,AHCCCSwillberesponsibleforprovidingbehavioralhealthservicestoTitleXIXeligibleclients.Thoseservices,forbothchildrenandadults,arefederallymandatedandrequiretheStatematchtobebasedontheFederalMedicalAssistancePercentage(FMAP).ThebaselineforecastincludesincreasesinpopulationsandcapitationratesaswellasareductionintheStatesshareofMedicaidcosts.

EnrollmentsofComprehensiveMedicalandDentalProgram(CMDP)andNonCMDPchildrenareprojectedtoincreaseby,respectively,4.8%and0.29%duringFY2016andFY2017,whilethetraditionaladultpopulationisprojectedtoincreaseby0.91%duringFY2017.TheexpansionofMedicaidthroughtheAffordableCareAct,andsubsequentlytheenhancedFMAPratesofferedtoexpansionstates,hascreatedtwoadditionaladultpopulations:ExpansionStateAdults(childlessadultsunder100%oftheFederalPovertyLevel[FPL]),andNewlyEligibleAdults(parentsandchildlessadultswhoseincomesrangefrom100%to133%FPL).TheExecutiveprojectsa1.03%increaseinExpansionStateAdultsanda2%increaseinNewlyEligibleAdultsduringFY2017.

ForFY2017,theExecutiveprojectscapitationratestoincreaseby1.5%andthetraditionalFMAPtoincreaseby0.32%,from68.92%to69.24%.

TheExecutiverecommendsa$24.1millionincreaseintheGeneralFundappropriationanda$798,800increaseintheTobaccoTaxandHealthcareFundMedicallyNeedyAccountappropriationforBehavioralHealth

FY2017Funding

24,104.5GeneralFund798.8TobaccoTaxandHealthCareFund

24,903.3IssueTotal


SupplementalRecommendationsPrescriptionDrugRebate

ThePrescriptionDrugRebate(PDR)fundoffsetstheGeneralFundwithrebatescollectedfrompharmaceuticalfirmsfordrugspaidforbyAHCCCS.AsArizonasPDRfundhasbeencollectingmorerevenuethanwasappropriatedfromtheFund,theExecutiverecommendsa$30.9millionincreasefromthePrescriptionDrugRebateFundasanFY2016supplementalappropriation.

FY2016Funding

30,924.5PrescriptionDrugRebateFund30,924.5IssueTotal


PerformanceMeasures


Percentofwomenreceivingcervicalscreeningwithinathreeyearperiod

N/A NA 55 57

Percentofwellchildvisitsinthefirst15monthsoflifeEarlyPeriodicScreening,DiagnosisandTreatment

67.8 67.9 68.0 68.0

Percentofemployeeturnover 16.3 19.24 17.86 17.86Percentofadministrativeinvoicespaidwithin30days 97.3 95.8 95 95Percentoftotalprogrammaticpaymentscompletedelectronically 99 99 99 99Percentofenrolleesfilingagrievance .73 .62 1 1Membersatisfaction:percentofchoiceexercisedinmovingfromcurrenthealthplan

1.4 .3 2.0 2.0

Percentofapplicationsprocessedontime 47 54 97 97CostavoidancefromPredeterminationQualityControlProgram(inmillions)

22.22 17.62 19.39 21.32

Percentofmembersutilizinghomeandcommunitybasedservices 86.28 86.2 87.02 87.16Percentofwellchildvisitsinthefirst15monthsoflifeEarlyPeriodicScreening,DiagnosisandTreatment

67.8 67.9 68 68

KidsCaremonthlyenrollment 2,015 1,053 861 763Percentofchildrenwithaccesstoprimarycareprovider N/A *N/A *N/A *N/A


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000


AverageCapitatedPopulation

0

5,000,00010,000,000

15,000,00020,000,000

25,000,000

30,000,00035,000,000

40,000,000


GeneralFundCoreAdministrationExpenditures


AgencyExpenditures

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,000


Al l Funds GF

(in$1,000s)




AcuteCare 957,876.5 1,007,432.6 1,033,787.726,355.1Administration 54,351.0 53,058.2 56,814.13,755.9Children'sHealthInsuranceProgram 7,075.6 6,295.2 1,229.2(5,066.0)Children'sRehabilitativeServices 69,198.8 73,001.0 84,664.911,663.9LongTermCare 173,064.8 168,461.5 176,144.77,683.2MedicaidBehavioralHealthServices 0.0 0.0 472,048.8472,048.8NonTitleXIXBehavioralHealth 0.0 0.0 100,563.0100,563.0Proposition204 35,533.3 40,361.3 43,822.93,461.6

1,297,099.9 1,348,609.8 1,969,075.3AgencyTotalAppropriatedFunds 620,465.5



PersonalServices 14,553.8 14,856.5 19,069.94,213.4EREAmount 6,385.3 6,413.0 8,246.81,833.8Prof.AndOutsideServices 1,765.5 1,852.1 2,027.1175.0TravelInState 24.8 31.5 31.50.0TravelOutofState 8.4 19.7 19.70.0AidtoOthers 1,161,794.1 1,221,383.9 1,836,047.7614,663.8OtherOperatingExpenses 8,373.5 6,498.3 5,750.3(748.0)Equipment 467.9 5.6 333.1327.5TransfersOut 103,726.6 97,549.2 97,549.20.0




GeneralFund 1,155,737.2 1,205,162.3 1,754,888.4549,726.1BudgetNeutralityComplianceFund 2,538.3 3,482.9 3,597.0114.1Children'sHealthInsuranceProgramFund 6,340.3 7,674.4 1,891.0(5,783.4)




PrescriptionDrugRebateFund 79,020.9 83,778.8 114,703.330,924.5SubstanceAbuseServicesFund 0.0 0.0 2,250.22,250.2TobaccoProductsTaxFund 19,284.3 17,331.4 18,747.21,415.8TobaccoTaxandHealthCareFund 34,178.8 31,180.0 72,998.241,818.2


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