Audit Division

Audit Summary

Department of Personnel

Report LA96-34

Results in Brief

Nevada needs a highly qualified financial management workforce to keep pace with growth, technological change, and to ensure accountability of the public's funds. The state's personnel laws are designed to ensure the State attracts and retains highly qualified financial managers. These laws are based on principles of equal opportunity, competitive examination, and internal promotion. However, because of longstanding personnel practices and inappropriate qualification requirements, these principles are not always followed.

Although about half of the state's financial management positions were filled through internal promotion, many of those promoted did not face any competition or take an examination. In addition, for financial management positions, the Department allows an applicant's state experience to meet the requirement for a college education. Furthermore, the State lacks effective internship and entry level programs to attract its university business graduates. As a result, the State may not be hiring and promoting individuals with the qualifications needed to address the complex and changing financial management issues facing government today.

Principal Findings

1. Each year the State of Nevada receives and spends billions of dollars in taxes, fees, and federal grants. To ensure accountability, these funds must be properly controlled, accounted for, and spent according to legal requirements. Because much of this responsibility is placed on the state's financial management workforce, it is critical that they are highly qualified. (page 12)

2. Nevada's salary structure is sufficient to attract and retain highly qualified financial managers. Information we obtained shows Nevada's salaries were comparable to those in other states and in the private sector. (page 18)

3. Nevada's longstanding promotional practices restrict competition for top financial management positions. Promotional recruitments generated fewer than five candidates 71% of the time, and only one eligible candidate 41% of the time. On the other hand, open-competitive recruitments resulted in five or more candidates over 90% of the time. (page 21)

4. The Department often waives the formal examination process when recruitments generate five or fewer qualified applicants. Because most promotional recruitments resulted in five or fewer candidates, only 31% of the employees appointed through promotions took a formal examination. In contrast, open-competitive recruitments always resulted in an examination. (page 23)

5. The Department authorizes employees to improperly transfer to higher paying positions within state government. During the period covered by our audit, 11 employees were improperly promoted to financial management positions without facing competition and without taking an examination to demonstrate their knowledge and skills. (page 26)

6. Minimum qualifications for 229 of the state's 315 (73%) financial management positions list a college degree as a requirement. However, qualification equivalencies for all but 18 of these positions allow substitution of work experience for a bachelor's degree. In contrast, other professional positions of equal or lesser pay in the classified service require a bachelor's degree but do not allow work experience in lieu of the required education. (page 32)

7. The results of two recent examinations given by the Department indicate the qualification requirements for some positions are insufficient to ensure a highly qualified workforce. The results showed that 37 of 42 (88%) applicants with a related college degree passed, while only 1 of 13 (8%) without a degree passed. (page 33)

8. Minimum qualification requirements are inconsistent and sometimes require applicants without state experience to have significantly more education than state employees. For instance, applicants without state experience must have a bachelor's degree in accounting and two years of professional experience to qualify for an Accountant II position. However, classified employees need only 12 college credits and 2 years as an Accountant Technician II to qualify for the same position. (page 34)

9. A highly qualified financial manager has relevant work experience, and the conceptual knowledge and technical skills typically provided by a college education. Although the state's financial management workforce averaged nearly 13 years with the State and 6 years in financial management, only 37% had a related college degree. (page 35)

10. Half of the state's accounting personnel who are in positions requiring a college degree or college credits, do not meet the current minimum qualifications for their positions. Most employees do not meet the minimum qualifications because the education requirements were increased in 1993. The Department does not require employees to meet minimum qualifications when changes are made to their job classifications. (page 38)

11. The State spends hundreds of millions of dollars through the University System to provide students with the knowledge and skills necessary to succeed in professional positions. Between 1991 and 1995, 3,700 students graduated from business programs at the state's two universities. However, as of June 1995, only six of these graduates were financial managers in the state's classified service. Effective internship and other professional entry level programs could help prepare Nevada's financial management workforce for the future. (page 41)