1 credentialing fees department of regulation and licensing legislative audit bureau september 2004

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Credentialing FeesDepartment of Regulation and Licensing

Legislative Audit Bureau

September 2004

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Department of Regulation and Licensing’s Regulatory Activities

Support 21 boards with independent authority to license and discipline members

Support 17 additional boards and councils with more limited authority

Regulate directly a limited number of professions Wisconsin has 318,000 individual and business

credential holders in 84 professions and 26 business types

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Largest Regulated ProfessionsRegistered Nurse 67,700

Physician 20,500

Engineer 19,600

Barber or Cosmetologist 19,300

Barbering or Cosmetology Manager 15,500

Licensed Practical Nurse 15,500

Real Estate Salesperson 13,600

Real Estate Broker 13,400

Certified Public Accountant 12,600

Private Security Person 10,200

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Staffing and Funding

125.5 full-time equivalent staff and a FY 2003-04 budget of $11.1 million

All funds are program revenue, primarily from new and renewal credentialing fees

Statutes require that credentialing fees for each profession reflect the cost of services received by that profession

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Fee Concerns

New credentials are $53; renewals vary from $53 to $343

Department’s proposal for new fees in FY 2003-05 budget rejected for two reasons: – calculations were based on estimates rather than actual costs – proposal resulted in significant fee changes for some professions

LAB directed to determine whether the fee methodology reflected actual regulatory costs

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Current Allocation Method

Most costs (72.6%) are allocated equally, regardless of differences in level of service to different professions

Costs that are allocated by level of service (27.4%) are allocated by inaccurate measures of service delivery costs

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Proposed Allocation Method

Percentage of costs allocated based on level of services increases from 27.4% to 58.2%

Costs will be calculated based on actual time spent rather than estimates

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Comparison of Current and Proposed Allocation Methods

Current

27.40%

72.60%

Proposed

58.20%

41.80%

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Recommended Improvements to Proposed Method

Increase further the proportion of costs allocated based on actual staff time spent

Provide clear explanations of allocation methods to make the process more transparent and understandable

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Future Considerations

Determining levels of service for the boards

Determining total revenue needs

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Appropriation Balances (in millions)

FY 2003-04 FY 2004-05

Opening Balance $2.7 $3.6

Revenues 12.7 10.1

Lapses to General Fund (2.2) (2.2)

Total Available 13.2 11.5

Expenditures 9.6 10.4

Closing Balance $3.6 $1.1

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Legislative Options

Make no fee changes

Consider surcharges for those professions wishing increased levels of service

Consider adding an inflation factor to all fees

Implement the proposed methodology with the recommended improvements

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Renewal Fee ComparisonsProfession Midwest Avg. WI

Physician $272 $106

Pharmacist 149 97

Certified Public Accountant 84 59

Engineer 82 58

Barber 62 63

Registered Nurse 59 66

Licensed Practical Nurse 59 69

Cosmetologist 43 63

Real Estate Broker 94 128