A REPORT
TO THE

ARIZONA LEGISLATURE

Performance Audit Division
Performance Audit and Sunset Review

Arizona State Board
of Physical Therapy

May • 2013
REPORT NO. 13-03

Debra K. Davenport
Auditor General

The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators and five
representatives. Her mission is to provide independent and impartial information and specific recommendations to improve the operations of state and local government entities. To this end, she provides financial audits and accounting services to the State and political
subdivisions, investigates possible misuse of public monies, and conducts performance audits of school districts, state agencies, and
the programs they administer.

The Joint Legislative Audit Committee
Senator Chester Crandell, Chair

Representative John Allen, Vice Chair

Senator Judy Burges
Senator Rich Crandall
Senator Steve Gallardo
Senator Katie Hobbs
Senator Andy Biggs (ex officio)

Representative Paul Boyer
Representative Andrea Dalessandro
Representative Martin Quezada
Representative Kelly Townsend
Representative Andy Tobin (ex officio)

Audit Staff
Dale Chapman, Director
Jeremy Weber, Manager and Contact Person
Steven Meyeroff, Team Leader
Laura Long
Amir Mach

Copies of the Auditor General’s reports are free.
You may request them by contacting us at:

Office of the Auditor General

2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333
Additionally, many of our reports can be found in electronic format at:

www.azauditor.gov

STATE OF ARIZONA
OFFICE OF THE

DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL

MELANIE M. CHESNEY

AUDITOR GENERAL

DEPUTY AUDITOR GENERAL

May 31, 2013

Members of the Arizona Legislature
The Honorable Janice K. Brewer, Governor
Ms. Lisa Akers, President
Arizona State Board of Physical Therapy
Mr. Charles Brown, Executive Director
Arizona State Board of Physical Therapy
Transmitted herewith is a report of the Auditor General, A Performance Audit and Sunset
Review of the Arizona State Board of Physical Therapy (Board). This report is in response to
an October 26, 2010, resolution of the Joint Legislative Audit Committee. The performance
audit was conducted as part of the sunset review process prescribed in Arizona Revised
Statutes §41-2951 et seq. I am also transmitting within this report a copy of the Report
Highlights for this audit to provide a quick summary for your convenience.
As outlined in its response, the Board agrees with all of the findings and plans to
implement all of the recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
Sincerely,

Debbie Davenport
Auditor General

2910 NORTH 44 th STREET • SUITE 410 • PHOENIX, ARIZONA

85018 • (602) 553-0333 • FAX (602) 553-0051

Arizona State Board
of Physical Therapy
REPORT HIGHLIGHTS
PERFORMANCE AUDIT

Our Conclusion
Created in 1952, the Arizona
State Board of Physical
Therapy (Board) regulates
the practice of physical
therapy by licensing physical
therapists and certifying
physical therapist assistants,
registering certain physical
therapy businesses,
investigating complaints,
and imposing discipline for
violations of board statutes
and rules. The Board
should continue to improve
its complaint resolution
timeliness. Although the
Board resolved the majority
of the complaints it received
between fiscal years 2009
and 2011 within the 180-day
standard for health regulatory
boards, 43 percent of the
complaints took between
181 days to 18 months
to be resolved. Factors
contributing to lengthy
complaint resolution included
lengthy investigations and
delays in holding formal
and informal hearings. The
Board has taken steps to
improve complaint resolution
timeliness, which it should
continue to monitor.

Board should continue to improve complaint resolution
timeliness
Board did not resolve many complaints in
a timely manner—The Board is responsible Length of time to resolve complaints
for investigating complaints against physical Fiscal years 2009 through 2011
157 Total Complaints
therapists and physical therapist assistants
and taking appropriate disciplinary action,
1 year to
18 months
as necessary. Complaints are either received
14%
from the public or initiated by the Board. In
fiscal year 2012, the Board received or opened
on its own 53 complaints for investigation. We
analyzed 157 complaints the Board received
or opened on its own between fiscal years
Up to 180
181 days
days
2009 and 2011. We found that 57 percent of to 1 year
57%
29%
these complaints were resolved within 180
days, which is the complaint resolution time
frame standard we apply to health regulatory
boards. However, 43 percent exceeded the standard, taking up to 18 months to resolve.
We sampled 20 of the 157 complaints, of which 13 took longer than 180 days to resolve
and 7 took less than 180 days to resolve. For those 13 complaints, it took board staff a
median time of 155 days to complete the investigations. In contrast, the 7 complaints
took a median time of 32.5 days to investigate. Board staff explained that several
factors can affect the length of an investigation, such as the number of potential violations to be investigated, the number of medical records and billing statements to be
reviewed, and the number of interviews to be conducted. In addition, only a part-time
investigator handles the investigations. Additional delays to the process are caused by
delays in scheduling informal and formal hearings.
Lengthy complaint process can impact the public—Licensees who are under investigation can continue to practice during a complaint investigation, even though they
may not be fit to do so. In one case, a complaint against a licensee accused of sexual
misconduct with a patient took 12 months to resolve. Although the Board did not find
sexual misconduct, it found that the licensee provided substandard care resulting in the
Board administering 1 year of probation and continuing education.
Board should continue to improve complaint resolution timeliness—
The Board has taken steps to improve complaint resolution timeliness by
scheduling a formal hearing when the licensee does not respond to an informal
hearing request. In addition, board staff reported that they are in the process
of developing complaint database reports to monitor timeliness. The Board
has also proposed to increase the part-time investigator to a full-time position.

2013
May • Report No. 13-03

Recommendation
The Board should continue to monitor the time it takes to resolve complaints and
take additional actions if necessary, such as continuing to assess the efficiency of its
complaint resolution process and analyzing its investigative staffing needs.

Arizona State Board
of Physical Therapy

A copy of the full report is available at:
www.azauditor.gov
Contact person:
Jeremy Weber (602) 553-0333

REPORT HIGHLIGHTS

PERFORMANCE AUDIT

May 2013 • Report No. 13-03

TABLE OF CONTENTS
Introduction
Finding 1: Board should continue its efforts to improve
complaint resolution timeliness

1
7

Board responsible for investigating complaints

7

Board did not resolve many complaints in a timely manner

7

Board should continue efforts to improve complaint resolution timeliness

9

Recommendations

Sunset factor analysis
Appendix A: Methodology

10
11
a-1

Agency Response
Table
1

Schedule of revenues, expenditures, and changes in fund balance
Fiscal years 2010 through 2013
(Unaudited)

5

Figure
1

Length of time to resolve complaints
Fiscal years 2009 through 2011
(Unaudited)

8

concluded

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INTRODUCTION
Scope and Objectives

The Office of the Auditor
General has conducted a
performance audit and sunset
review of the Arizona State
Board of Physical Therapy
(Board) pursuant to an
October 26, 2010, resolution
of the Joint Legislative
Audit Committee. This audit
was conducted as part of
the sunset review process
prescribed in Arizona Revised
Statutes (A.R.S.) §41-2951 et
seq. This performance audit
and sunset review focused on
the timeliness of the Board’s
complaint resolution process
and includes responses to the
statutory sunset factors.

Board regulates physical therapists and
physical therapist assistants
Board’s mission
The Board was created in 1952 and its mission is to protect the public from
incompetent, unprofessional, and unlawful physical therapy practices. The
Board accomplishes this mission by licensing qualified physical therapists and
certifying qualified physical therapist assistants (see textbox), investigating and
resolving complaints, disciplining violators, and providing information to the
public.
Board-regulated professionals
Physical therapists—Examine, evaluate, and test persons who
have mechanical, physiological, and developmental impairments,
functional limitations and disabilities, or other health- and
movement-related conditions.
Physical therapist assistants—Assist physical therapists by
performing physical therapy procedures and related tasks that have
been selected and delegated by a supervising physical therapist.
Source: Auditor General staff analysis of A.R.S. §32-2001.

The Board was originally established to regulate only physical therapists.
However, the Legislature expanded the Board’s authority in 1998 to also
regulate physical therapist assistants. In September 2011, the Board also
began registering certain business entities that provide physical therapy
services (see page 2 for additional information).

Licensing and registration requirements
General requirements for licensure are similar for both physical therapists and
physical therapist assistants and include: (1) completion of an approved
professional education program; (2) passing the applicable National Physical
Therapy Examination; and (3) passing the Arizona Jurisprudence Examination.
According to board records, the Board had 3,934 licensed physical therapists
and 1,061 certified physical therapist assistants as of April 2013.

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Professionals licensed in another state who wish to practice in Arizona may apply for licensure or
certification by endorsement. According to A.R.S. §32-2026, the Board may issue licenses or
certificates by endorsement to physical therapists and physical therapist assistants who are currently
licensed or certified in another jurisdiction of the United States, provided that the qualification
requirements of the applicant’s current license or certificate meet the requirements set for initial
licensure or certification in Arizona. A.R.S. §32-2022 also requires foreign-educated applicants to
provide satisfactory evidence that the applicant’s education is substantially equivalent to the
requirements of physical therapists educated in accredited educational programs as determined by
the Board.
In addition, Laws 2010, Ch. 120, added A.R.S. §32-2030, which requires businesses that offer
physical therapy services but are not entirely owned by a licensed physical therapist or other
licensed medical professional to register with the Board. The Board reported that it sought this
legislation at the request of stakeholders who were concerned about how patient records at these
businesses were retained, released, and destroyed. The law became effective in September 2011
and requires these businesses to develop a records protocol in addition to registering with the
Board. According to board staff, this requirement helps ensure that patient records are handled with
the same standards that would be required if the business were owned by a licensed physical
therapist or other licensed medical professional. As of August 2012, 14 physical therapy businesses
not entirely owned by a licensed physical therapist or other licensed medical professional had
registered with the Board.

Complaint investigation and discipline
The Board is responsible for investigating complaints against licensed physical therapists, certified
physical therapist assistants, and registered businesses, and taking appropriate nondisciplinary or
disciplinary action, as necessary. A.R.S. §32-2045 authorizes the Board to investigate (1) written
complaints received from the public, and (2) complaints opened by the Board when it has reason
to believe that a violation of board statutes or rules may have occurred. Additionally, A.R.S. §32-2044
identifies numerous violations for which the Board can take disciplinary action. These include
licensees or certificate holders engaging in sexual misconduct with a patient, providing substandard
care, failing to maintain adequate patient records, being convicted of a felony, and physical
therapists improperly supervising physical therapist assistants. According to board records, the
Board received and/or opened for investigation 53 complaints against physical therapists and
physical therapist assistants in fiscal year 2012. The Board reported that it had not received any
complaints against registered physical therapy businesses as of December 2012.
After completing an investigation, the Board may dismiss the complaint or take nondisciplinary or
disciplinary actions authorized by statute (see textbox, page 3). Auditors analyzed 157 complaints
that the Board received or opened on its own in fiscal years 2009 through 2011 and found that the
majority of the complaints resulted in disciplinary action.1 Specifically, 81 complaints resulted in a
1 According to its complaint database, the Board received or opened on its own a total of 178 complaints between fiscal years 2009 through

2011. However, auditors were able to analyze only 157 of these complaints to assess the Board’s complaint resolution timeliness because
21 complaints had incomplete data or were still open as of August 2012.

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disciplinary action, 55 complaints resulted in a
nondisciplinary action, and 21 complaints
resulted in dismissal. See Finding 1, pages 7
through 10, for auditors’ analysis of the Board’s
timeliness in resolving these 157 complaints.
In addition, the Board provides the public with
information about licensed physical therapists
and certified physical therapist assistants on
its Web site. A search by name or license
number retrieves the licensee’s or certificate
holder’s status and disciplinary history,
including any board orders or consent
agreements. The Web site also informs the
public that they may call the board office to
obtain additional information about dismissed
complaints and nondisciplinary actions taken
against a licensee or certificate holder, as
required by statute.

Board’s nondisciplinary and disciplinary options
Nondisciplinary options

•
•

Issue an advisory letter
Require continuing education

Disciplinary options

•
•
•
•
•

Issue a decree of censure
Impose civil monetary penalties of up to $10,000 per violation
Impose a probation term
Accept the voluntary surrender of a license
Suspend, revoke, or deny licensure

Source: Auditor General staff review of A.R.S. §§32-2045 and 32-2047.

Organization and staffing
The Board consists of seven governor-appointed members, including four physical therapists, one
physical therapist assistant, and two public members. Board members are eligible to serve two
consecutive 4-year terms. The Board is assisted by staff led by an executive director. The Board was
appropriated 3.8 full-time equivalent (FTE) staff positions for fiscal year 2013.1 In addition to the
executive director, the Board employs a licensing administrator, an officer manager, and a half-time
investigator.

Budget
The Board does not receive any State General Fund monies. Rather, the Board’s revenue comes
primarily from initial and renewal license application fees. The Board has a biennial renewal process
that ends on August 31 of even-numbered years for physical therapists and physical therapist
assistants, which causes the Board’s revenues in odd-numbered fiscal years to be much higher than
the revenues in even-numbered fiscal years. The Board’s initial license application fee for physical
therapists is $260 if the applicant applies more than 12 months before the next fixed renewal date,
and $190 if the applicant applies less than 12 months before the next fixed renewal date.2 The initial
1 Although the Board was appropriated 3.8 FTEs, according to its Executive Director, the Board was appropriated funding to cover only 3.5

FTEs.

2 The initial license application fee is discounted to $190 if the applicant applies within 12 months of the fixed renewal date because all

physical therapists’ licenses expire on the same date, August 31 of even-numbered years, regardless of when they applied for licensure.

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license application fees for physical therapist assistants are $160 and $120 for the same time
frames. The fee for biennial renewal is $160 for physical therapists and $55 for physical therapist
assistants. The Board also has a biennial renewal process that ends on August 31 of odd-numbered
years for business registration. The initial and renewal business registration fee is $50.
The Board is required to remit 100 percent of all collected penalties and 10 percent of all other
revenues to the State General Fund. As shown in Table 1 (see page 5), during fiscal year 2012, the
Board received approximately $231,700 in gross revenues and remitted nearly $25,500 to the State
General Fund. Its estimated fiscal year 2013 gross revenues are $657,800. The Board’s expenditures
were approximately $346,700 in fiscal year 2012 and are estimated to be $360,000 in fiscal year
2013. Personnel costs accounted for the majority of these expenditures. Finally, the Board’s end-ofyear fund balance fluctuates because of its biennial renewal process and was approximately
$405,200 at the end of fiscal year 2012, which was not a renewal year. The Board estimates that its
fund balance will increase to approximately $628,400 by the end of fiscal year 2013.

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Table 1:

Schedule of revenues, expenditures, and changes in fund balance
Fiscal years 2010 through 2013
(Unaudited)
2010
(Actual)

2011
(Actual)

2012
(Actual)

2013
(Estimate)

Revenues
Licenses1
Sales of goods and services
Fines, forfeits, and penalties
Other
Gross revenues
2
Net credit card transaction fees
3
Remittances to the State General Fund
Net revenues
Expenditures and transfers
Personal services and related benefits
Professional and outside services
Travel
Other operating
Equipment
Total expenditures
Transfers to the State General Fund4
Transfers to the Office of Administrative Hearings
Total expenditures and transfers
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year

$

208,508
19,410
4,150
8,440
240,508
1,527
(26,082)
215,953

$

221,596
26,453
3,710
50,531
17,725
320,015
400
1,161
321,576
(105,623)
410,007
$ 304,384

619,829
17,010
5,265
9,228
651,332
(2,745)
(66,743)
581,844
226,488
29,435
4,461
54,245
5,128
319,757
9,400
7,176
336,333

$

245,511
304,384
549,895

$

203,251
16,705
3,150
8,627
231,733
1,668
(25,469)
207,932

$

254,220
38,874
3,911
49,280
416
346,701
5,900

252,300
39,200
5,500
60,600
2,400
360,000
6,000
366,000

352,601
(144,669)
549,895
$ 405,226

620,800
18,500
12,700
5,800
657,800
(3,000)
(65,600)
589,200

$

223,200
405,226
628,426

1 License revenue fluctuates yearly because licenses are renewed every 2 years.
2 According to the Board, amounts fluctuate because of timing issues between collecting fees and paying the various parties involved with the process.
3 As required by A.R.S. §§32-2004 and 32-2048, the Board remits to the State General Fund 100 percent of all collected penalties and 10 percent of all other

revenues.

4 Amount consists of transfers to the State General Fund in accordance with Laws 2010, 7th S.S., Ch. 1, §148, and Laws 2011, Ch. 24, §§108, 129, and 138,

to provide support for state agencies.

Source:

Auditor General staff analysis of the Arizona Financial Information System (AFIS) Accounting Event Transaction File for fiscal years 2010 through 2012; the
AFIS Management Information System Status of General Ledger-Trial Balance screen for fiscal years 2010 through 2012; and board-prepared estimates
for fiscal year 2013.

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State of Arizona
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FINDING 1
The Arizona State Board of
Physical Therapy (Board)
should continue its efforts to
improve complaint resolution
timeliness. Although the
Board resolved the majority
of its complaints within
the 180-day standard
used to evaluate Arizona
health regulatory boards,
approximately 43 percent
of the complaints received
in fiscal years 2009 through
2011 were not resolved
within this time frame.
Lengthy investigations and
other factors contributed to
untimely complaint resolution,
which can put public safety
at risk because licensees
can continue practicing
unchecked until the Board
takes action. The Board
has taken steps to improve
its complaint resolution
timeliness, but should
continue to monitor the time
it takes to resolve complaints
and take additional actions if
necessary, such as continuing
to assess the efficiency of its
complaint resolution process
and analyzing its investigative
staffing needs.

Board should continue its efforts to improve
complaint resolution timeliness
Board responsible for investigating complaints
As discussed in the Introduction (see pages 2 through 3), the Board is
responsible for investigating complaints against licensed physical therapists
and certified physical therapist assistants (licensees) and taking appropriate
nondisciplinary or disciplinary action, as necessary. After a complaint has been
investigated by board staff, the Board reviews the investigation at a board
meeting. Based on its review, the Board can either resolve the complaint at that
meeting or move the complaint to informal or formal hearings. During these
processes, the Board may dismiss the complaint or take nondisciplinary
action, such as issuing an advisory letter or requiring the licensee to complete
additional education courses. If the Board finds a violation at an informal
hearing, the Board may impose any of the following disciplinary actions: issue
a decree of censure, restrict a license or certificate, or impose a civil penalty of
$250 to $500. Statute requires the Board to hold a formal hearing for some
disciplinary options, such as suspending or revoking a license or imposing a
civil penalty that exceeds $500.

Board did not resolve many complaints in a timely
manner
Although the majority of complaints the Board received or opened on its own
in fiscal years 2009 through 2011 were resolved in a timely manner,
approximately 43 percent of the complaints it received were not resolved in a
timely manner. Lengthy investigations and other factors have contributed to
untimely complaint resolution. Untimely complaint resolution can put the public
at risk because licensees under investigation continue to practice unchecked.
Conversely, if the complaint proves to be unwarranted, untimely resolution can
adversely affect the licensee because information about the existence of an
open complaint may affect his/her practice.

Majority of complaints resolved in a timely manner, but many
are not—The Office of the Auditor General has found that Arizona health
regulatory boards should resolve complaints within 180 days of receiving
them, which includes the time to both investigate and adjudicate complaints. This is the standard against which Arizona health regulatory boards
are evaluated. Auditors’ analysis of board data for 157 complaints the Board
received or opened on its own in fiscal years 2009 through 2011 showed
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Figure 1: Length of time to resolve complaints
Fiscal years 2009 through 2011
(Unaudited)
157 Total Complaints
1 year to
18 months
14%

Source:

that the median time to resolve these complaints was 152
days.1 As shown in Figure 1, approximately 57 percent of these
complaints were resolved within 180 days. However, approximately 43 percent of the complaints took between 181 days to
18 months to resolve, the majority of which were complaints
that resulted in discipline.

Lengthy investigations and other factors contributed to untimely complaint resolution—To determine

what factors contributed to the delays, auditors reviewed a
judgmental sample of 20 of the 157 complaints auditors analyzed between fiscal years 2009 and 2011. Specifically, auditors
Up to 180
181 days
days
selected 13 complaints that took longer than 180 days to
to 1 year
57%
29%
resolve and 7 complaints that took less than 180 days to
resolve. Auditors found that board staff took a median time of
Auditor General staff analysis of 157 complaints received between
fiscal years 2009 through 2011.
155 days to complete the investigations for the 13 complaints
that took more than 180 days to resolve and 32.5 days to complete the investigations for the 7 complaints that were resolved
in under 180 days. For 8 of the 13 complaints, the time taken to complete the investigations
accounted for the majority of total time taken to resolve the complaints.
According to board staff, several factors can affect the length of an investigation, such as the
number of potential violations to be investigated, the number of medical records and billing
statements to be reviewed, and the number of interviews to be conducted. Board staff also
reported that an increase in the number of complex complaints received in the summer of 2010
affected the ability of its half-time investigator to complete investigations in a timely manner and
created an investigative backlog that the Board was still addressing during the audit.2 As of
November 2012, the Board had 21 complaints under investigation, of which 9 complaints had
been open between 6 months and 1 year.
Board staff also identified other factors contributing to untimely complaint resolution that auditors
noted in some cases. Specifically:

•

Formal hearing scheduling delays—For the few complaints that go to a formal hearing,
scheduling formal hearings can delay complaint resolution. For example, in March 2010, the
Board moved to schedule a formal hearing with the Office of Administrative Hearings for two
related complaints that were processed together, but the hearing did not begin until August
2010, which prolonged complaint resolution by several months. These two complaints took
over 500 days to resolve.

•

Licensees’ failure to attend informal hearings—Complaint resolution is delayed when
licensees fail to attend informal hearings. Arizona Administrative Code R4-24-306(C) requires

1 According to its complaint database, the Board received or opened on its own a total of 178 complaints between fiscal years 2009 through

2011. However, auditors were able to analyze only 157 of these complaints to assess the Board’s complaint resolution timeliness because
21 complaints had incomplete data or were still open as of August 2012.

2 According to board staff, the investigator actively works through one investigation at a time until it is either completed or she cannot move

any further without additional information.

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that the licensee attend the informal hearing for it to be held. If the licensee does not attend,
the Board can reschedule the informal hearing, move to a formal hearing, or take
nondisciplinary action. In one complaint auditors reviewed, the licensee did not attend the
informal hearing and the Board decided to reschedule it, which resulted in another 28 days to
resolve the complaint. This complaint took 252 days to resolve.

Lengthy complaint processing can affect public safety and licensees—Delays in
resolving complaints can affect public safety. Licensees alleged to have violated board statutes
and rules can continue to practice while under investigation, even though they may be unfit to do
so or may need supervision. In such instances, lengthy investigations may delay board actions
that protect the public.1 For example:

•

Board took 12 months to investigate a complaint and discipline a licensee for
substandard care of a patient—This complaint involved allegations that a licensee engaged
in sexual misconduct by coming into contact with a patient’s genital region without following
standard procedures. The Board did not find the licensee in violation of sexual misconduct,
but determined that the licensee provided substandard care and failed to maintain adequate
patient records. The Board took approximately 6 months to complete the investigation and
another 6 months to conduct the hearings and administer discipline, which included 1 year of
probation, 6 hours of continuing education, and an audit of patient records.

Conversely, if complaints turn out to have no merit, licensees themselves can be affected by a
lengthy resolution process. For example, a board member said that it may be difficult for those
with open complaints to find a new job or get licensed in another state.

Board should continue efforts to improve complaint resolution
timeliness
The Board has taken steps to improve complaint resolution timeliness. Specifically, in September
2012, the Board implemented a new procedure for scheduling informal hearings. The Board gives
licensees 20 days to respond to an informal hearing notice indicating whether they will be in
attendance. If licensees do not respond, board staff will instead notify the licensee that it will be
holding a formal hearing at the scheduled time, which does not require the licensee to be in
attendance. If licensees respond that they will not be in attendance, but request a new informal
hearing date, board staff will reschedule the informal hearing. In addition, board staff reported that
they regularly discuss the status of open complaints and that they are in the process of developing
complaint database reports to monitor timeliness. Finally, in its fiscal years 2014 and 2015 budget
request, the Board requested authority and an additional appropriation of approximately $29,000 to
increase its half-time investigator position to a full-time position. The Board made this request
because it believes that the volume and complexity of complaints has increased the time it takes to

1 Although licensees can continue to practice while under investigation, the Board may “take emergency action ordering the summary

suspension of a license or certificate or the restriction of the licensee’s practice or certificate holder’s employment pending proceedings by
the Board,” according to A.R.S §32-2045.

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investigate and resolve them; however, the Board did not perform a workload analysis to support
this request.
The Board should continue to monitor the time it takes to resolve complaints. If complaints continue
to be resolved in an untimely manner, the Board should continue to review its complaint resolution
process and make changes to ensure that this process is as efficient as possible. In addition,
regardless of whether the Board is appropriated a full-time investigator position in fiscal year 2014,
the Board should continue to assess its investigative staffing needs. This assessment should include
a documented workload analysis that compares the Board’s investigative workload, including an
estimate of future workload, with its staff resources. The Board should then take appropriate action
based on the results of this analysis. For example, if the Board determines that additional staff
resources are needed, it could seek additional funding through the appropriations process.
Alternatively, if additional staff resources are occasionally needed to address workload fluctuations,
the Board could consider using contract investigators as needed and seek additional funding for
contractors if necessary.

Recommendations:
1.1 The Board should continue to monitor the time it takes to resolve complaints. If complaints
continue to be resolved in an untimely manner, the Board should:

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a.

Continue to review its complaint resolution process and make changes as needed to
ensure that it is as efficient as possible.

b.

Continue to assess its investigative staffing needs. This assessment should include a
documented workload analysis that compares the Board’s investigative workload,
including an estimate of future workload, with its staff resources. The Board should then
take appropriate action based on the results of this analysis.

SUNSET FACTORS
In accordance with Arizona
Revised Statutes (A.R.S.)
§41-2954, the Legislature
should consider the factors
included in this report in
determining whether the
Arizona State Board of
Physical Therapy (Board)
should be continued or
terminated.

Sunset factor analysis
1.

The objective and purpose in establishing the Board and the extent
to which the objective and purpose are met by private enterprises in
other states.
The Board was created in 1952 and its mission is to protect the public
from incompetent, unprofessional, and unlawful physical therapy practices.
The Board accomplishes this mission by licensing qualified physical
therapists and certifying qualified physical therapist assistants,
investigating and resolving complaints, disciplining violators, and providing
information to the public. The Board was originally established to regulate
physical therapists. However, the Legislature expanded the Board’s
authority in 1998 to also regulate physical therapist assistants who assist
physical therapists by performing physical therapy procedures and
related tasks that have been selected and delegated by a supervising
physical therapist. In addition, A.R.S §32-2030 requires businesses that
offer physical therapy services but are not entirely owned by a licensed
physical therapist or other licensed medical professional to register with
the Board. The Board reported that it sought this law, which became
effective in September 2011, at the request of stakeholders who were
concerned about how patient records at these businesses were retained,
released, and destroyed.

This analysis includes
recommendations for the
Board to develop and
implement policies and
procedures regarding
requests for information by
the public and to develop a
method to identify physical
therapy businesses that meet
the criteria for registration but
are not registered (see Sunset
Factor 2, pages 12 through
14).

Auditors did not identify any states that met the objective and purpose of
the Board through private enterprises. According to the Federation of
State Boards of Physical Therapy (Federation), all 50 states regulate the
practice of physical therapy through a state agency, of which all 50 states
regulate physical therapists and 48 states regulate physical therapist
assistants.
2.

The extent to which the Board has met its statutory objective and
purpose and the efficiency with which it has operated.
The Board has met its statutory objective and purpose, but should
continue to improve in some areas. Some examples in which the Board
has efficiently met its objectives and purposes include:

•

Board licenses and certifies qualified applicants in a timely
manner—Auditors reviewed a sample of 30 board-approved or
-denied license or certification applications received in fiscal years
2011 and 2012 and found that the Board issued licenses or
certifications only to qualified applicants. Board staff use a checklist
form to document that applicants submitted all necessary paperwork,

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and they also maintain a database that generates notices of deficiency, completeness,
pre-approval, and approval. In addition, board data indicated that licenses are processed
within the overall time frame allowed by board rules. Arizona Administrative Code (AAC)
R4-24-209 requires the Board to complete its overall review of licensing applications within
75 days. Auditors’ analysis of the Board’s licensing database showed that applications
received in fiscal years 2011 and 2012 were processed within the overall time frame
allowed by board rules.

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•

Board has implemented pre-approval process to streamline licensure and certification
process—In February 2012, the Board authorized a pre-approval licensure and certification
process in response to a change regarding when license and certification exams are
offered. To become licensed or certified, applicants must pass the National Physical
Therapy Examination developed by the Federation. During fiscal year 2012, the Federation
switched from offering the exams on demand to fixed-date testing. Prior to this change,
board management reported the Board required applicants to graduate from their
education programs prior to taking the exams. In response to the change in the exam
schedule, the Board sought a statutory change to allow applicants to take the exams up
to 120 days prior to graduation (see Sunset Factor 8, page 15, for additional information).
The Board also implemented a process to pre-approve applications pending the Board’s
receipt of passing test scores or other required documentation such as final transcripts.
Once the documentation is received, board staff may then issue the credential without
waiting for subsequent board approval.

•

Board disciplined acts of unprofessional conduct for complaints reviewed—Auditors
reviewed a judgemental sample of 20 complaints received between fiscal years 2009 and
2011 and found that the Board appropriately dismissed complaints without merit and took
disciplinary action when complaint allegations and associated violations were substantiated.
Auditors also found that the Board takes progressive discipline against licensees who have
prior disciplinary history. In addition to the sample, auditors analyzed two licensees who
had multiple disciplinary actions taken against them between 2007 and 2011. Auditors
found in both instances that the Board considered the licensee’s prior violations and
disciplinary history when determining the type and severity of discipline for the most recent
complaint. Lastly, auditors analyzed three additional complaints with similar violations that
the Board received between fiscal years 2009 and 2011 to evaluate the consistency of the
Board’s discipline. Auditors found that the Board disciplined each of the three licensees
consistently.

•

Board provides appropriate public information—Auditors’ review of the Board’s public
information practices found that its staff generally provided appropriate public information
over the phone and that its Web site also provides appropriate public information. Auditors
placed four anonymous phone calls to the Board in August and October 2012 to request
information about specific licensees and found that board staff generally provided
appropriate information, including the status of a physical therapist’s license and any
disciplinary actions taken against the physical therapist. However, board staff did not
provide disciplinary actions for one call, but told auditors that they needed to submit a
written or online electronic request for this information. For this call, the staff person

responsible for taking public calls was out of the office, and it was taken by another staff
person. Although the Executive Director stated that he trains staff on how to respond to
phone requests, the Board does not have written policies and procedures indicating what
information should be provided. To help ensure appropriate information is provided by all
staff taking calls, the Board should develop and implement policies and procedures
regarding information that should be provided and train all staff accordingly.
In addition, auditors reviewed the Board’s Web site for information about specific licensees
and found that the information complied with A.R.S. §32-3214, which prohibits state
agencies from providing information on their Web sites regarding dismissed complaints
and nondisciplinary actions or orders taken against licensees.
However, the audit found that the Board can better meet its statutory objectives by:

•

Continuing to improve the timeliness of its complaint resolutions—As discussed in
Finding 1 (see pages 7 through 10), the Board should continue its efforts to improve
complaint resolution timeliness. Although the Board resolved the majority of complaints
within the 180-day standard used to evaluate the timeliness of complaint processing by
Arizona health regulatory boards, approximately 43 percent of the 157 complaints received
in fiscal years 2009 through 2011 were not resolved within this time frame.1 Lengthy
investigations, fluctuations in the Board’s investigative caseload, and issues related to
scheduling hearings have contributed to untimely complaint resolution.
To address these issues, the Board has taken steps to streamline its complaint resolution
process and has requested increasing its half-time investigator position to a full-time
position in its fiscal years 2014 and 2015 budget request. The Board should continue to
monitor the time it takes to resolve complaints and take additional actions if complaints
continue to be resolved in an untimely manner. Specifically, if necessary, the Board should
continue to assess the efficiency of its complaint resolution process and make changes as
needed and continue to assess its investigative staffing needs by conducting a complaint
workload analysis.

•

Taking steps to better identify and register physical therapy businesses—In 2010, the
Board sought legislation that would require businesses that offer physical therapy services
but are not entirely owned by a licensed physical therapist or other licensed medical
professional to be registered by the Board. As stated previously, the Board reported that it
sought this legislation at the request of stakeholders who were concerned about how
patient records at these businesses were retained, released, and destroyed. As a result,
the Legislature added A.R.S. §32-2030 in the 2010 legislative session, which requires these
businesses to develop a records protocol in addition to registering with the Board.
According to board staff, this requirement helps ensure that patient records are handled
with the same standards that would be required if the business were owned by a licensed
physical therapist or other licensed medical professional.

1 According to its complaint database, the Board received or opened on its own a total of 178 complaints between fiscal years 2009 through

2011. However, auditors were able to analyze only 157 of these complaints because 21 complaints had incomplete data or were still open
as of August 2012.

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However, as of August 2012, only 14 businesses had registered with the Board, and the
Board’s Executive Director believes that more businesses should be registered. According
to the Executive Director, the Board does not have a way to identify additional businesses
that should be registered. To help ensure that the Board registers all necessary businesses,
the Board should develop a method to identify businesses that meet the criteria but are not
registered. For example, the Board could survey physical therapists and physical therapist
assistants on their renewal applications for their employer information. Alternately, the
Board could contact physical therapists and physical therapist assistants to advise them
of the business registration requirement and ask them if they work for a business that may
need to be registered.
3.

The extent to which the Board serves the entire State rather than specific interests.
The Board serves physical therapy professionals, their clients, and the public throughout the
State by ensuring that physical therapists and physical therapist assistants are qualified to
practice physical therapy. In addition, it receives and investigates complaints filed by the public
against physical therapists and physical therapist assistants. Further, the Board provides the
public with information on its Web site regarding physical therapy professionals’ licensing or
certification status and disciplinary history. The Web site also informs the public that it may call
the board office to obtain information about dismissed complaints and nondisciplinary actions
taken against a physical therapy professional, as required by statute.

4.

The extent to which rules adopted by the Board are consistent with the legislative
mandate.
General Counsel for the Auditor General has analyzed the Board’s rule-making statutes and
believes that the Board has fully established rules required by and that are consistent with
statute.

5.

The extent to which the Board has encouraged input from the public before adopting its
rules and the extent to which it has informed the public as to its actions and their expected
impact on the public.
Auditors found that the Board has encouraged input from stakeholders before adopting rules.
Specifically, the Board submitted its proposed rule changes concerning inactive and retired
license statuses in February 2012 to the Arizona Administrative Register and sought stakeholder
input before adopting the rules.
Auditors assessed the Board’s compliance with various provisions of the State’s open meeting
law for its July through October 2012 board meetings and found the Board to be in compliance.
For example, as required by open meeting law, the Board posted meeting notices and agendas
on its Web site at least 24 hours in advance and posted the notices and agendas at the physical
locations where the Board’s Web site states they will be posted. The Board also posted written
meeting minutes on its Web site, and audio recordings of meetings were available within 3
business days following the board meeting. Auditors determined that these meeting notices

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and written minutes complied with statute. Further, the Board also provided a call to the public
during the board meetings auditors observed, inviting members of the public and professional
stakeholders to address board members regarding items on the agenda or professional
concerns.
Finally, the Board has notified licensees of changes in its practices, such as newly changed
rules or statutes, through its Web site and written correspondence.
6.

The extent to which the Board has been able to investigate and resolve complaints that
are within its jurisdiction.
The Board has statutory authority to investigate and resolve complaints within its jurisdiction and
has various nondisciplinary and disciplinary options available to use, such as issuing an
advisory letter, and suspending or revoking a license. However, as discussed in Finding 1 (see
pages 7 through 10), auditors found that the Board did not resolve all complaints in a timely
manner. Although the Board has taken steps to improve timeliness, it should continue monitoring
the time it takes to resolve complaints and take additional actions if necessary.

7.

The extent to which the Attorney General or any other applicable agency of state
government has the authority to prosecute actions under the enabling legislation.
A.R.S. §32-2048(C) states that the Board may apply for an injunction to prevent someone from
violating the physical therapist laws through the Attorney General or the appropriate county
attorney. On all other matters, the Attorney General serves as the Board’s legal advisor and
provides legal services as the Board requires according to A.R.S. §41-192(A)(1).

8.

The extent to which the Board has addressed deficiencies in its enabling statutes that
prevent it from fulfilling its statutory mandate.
The Board reported that both it and stakeholders have sought statutory changes to address
deficiencies in its statutes. These include the following:

•

Laws 2012, Ch. 24, amended A.R.S. §32-2024 to allow physical therapists and physical
therapist assistants to take the national examination for licensure or certification up to 120
days prior to their scheduled graduation date. According to the Executive Director, this
allows applicants to enter the workforce more quickly by receiving pre-approval for
licensure or certification contingent on receiving a passing examination score and
graduating from an approved program.

•

Laws 2011, Ch. 138, added A.R.S. §§32-2031 and 32-2032 and amended A.R.S. §32-2042
to allow physical therapists and physical therapist assistants to put their license on retired
or inactive status when they present a written affidavit to the Board. The retired status allows
retired licensees or certificate holders to still use the initials “PT” or “PTA” after their name if
they include “(Retired)” or “(Ret.)” after the initials. The inactive status is intended for use
by physical therapy professionals who have temporarily stopped practicing or working in
Arizona. According to the Executive Director, this status allows the professionals to avoid

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having their licenses or certifications lapse and become administratively suspended and
allows them to renew their licenses or certifications when they return to work without having
to reapply to the Board.

9.

•

Laws 2010, Ch. 120, added A.R.S. §32-2030, which prohibits a business from offering
physical therapy services that is not entirely owned by a licensed physical therapist or other
licensed medical professional unless it is registered with the Board and the physical
therapy services are performed by a licensee or certificate holder. As discussed in Sunset
Factor 2 (see pages 13 through 14), this law requires businesses that offer physical therapy
services, but are not entirely owned by a licensed physical therapist or other licensed
medical professional, to register with the Board and to develop a records protocol.

•

Laws 2010, Ch. 35, amended multiple board statutes to allow the Board to establish
committees to carry out its duties, add reasons for which the Board may deny a license or
certificate, allow the Board to administratively suspend and reinstate licenses, and permit
the Board to impose a civil penalty of $250 to $500 at an informal hearing.

The extent to which changes are necessary in the laws of the Board to adequately comply
with the factors listed in the sunset law.
The audit did not identify any needed changes to board statutes.

10. The extent to which the termination of the Board would significantly affect the public
health, safety, or welfare.
Terminating the Board would affect the public’s health, safety, and welfare if its regulatory
responsibilities were not transferred to another entity. The Board protects the public by licensing
or certifying physical therapists and physical therapist assistants who meet Arizona’s
qualifications to practice physical therapy, by receiving and investigating complaints against
licensees alleging incompetence or unprofessional conduct, and by taking appropriate
disciplinary action against licensees when allegations have been substantiated. The Board also
provides information to the public about physical therapy professionals’ licensing status and
disciplinary history. These functions help protect the public from potential harm. For example,
auditors reviewed complaints investigated by the Board alleging actions by physical therapy
professionals that posed a threat to the public, including sexual misconduct, substance abuse,
and improper treatment.
11. The extent to which the level of regulation exercised by the Board compares to other
states and is appropriate and whether less or more stringent levels of regulation would
be appropriate.
The audit found that the level of regulation exercised by the Board appears appropriate and is
generally similar to that in other states. As stated in Sunset Factor 1 (see page 11), according
to the Federation of State Boards of Physical Therapy (Federation), all 50 states regulate
physical therapists, and 48 states also regulate physical therapist assistants. According to the
Federation, Arizona is the only state that registers physical therapy businesses that are not

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entirely owned by a licensed physical therapist or other licensed medical professional.1
According to board staff, the reason for this law is to ensure that patient records are handled
with the same standards that would be required if the business were owned by a licensed
physical therapist or other licensed medical professional.
The audit did not identify areas where more or less stringent levels of regulation would be
appropriate.
12. The extent to which the Board has used private contractors in the performance of its
duties as compared to other states and how more effective use of private contractors
could be accomplished.
The Board contracts for some administrative services and one regulatory function. Specifically,
the Board contracts with other state government agencies for administrative functions, such as
accounting and information technology services. With regard to its regulatory function of testing
applicants for licensure, the Board contracts with the Federation to administer the National
Physical Therapy Examination (NPTE). According to a Federation official, all 50 states use the
NPTE for its licensing examination. In addition, the Board also uses the Federation to administer
its jurisprudence examination for physical therapists and physical therapist assistants as do
seven other jurisdictions, according to the Federation.
Auditors identified one additional area where the Board could potentially use private contractors.
As discussed in Finding 1 (see pages 7 through 10), if complaints continue to be resolved in an
untimely manner, the Board should analyze its investigative staffing needs based on its
complaint workload to ensure complaints are resolved in a timely manner. If the Board
determines that additional staff resources are occasionally needed to address workload
fluctuations, the Board could consider using contract investigators and seek additional funding
for contractors as needed.

1 Federation of State Boards of Physical Therapy. (2011). Jurisdiction licensure reference guide: Level of autonomy. Alexandria, VA: Author.

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State of Arizona
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APPENDIX A
This appendix provides
information on the methods
auditors used to meet the
audit objectives.
We conducted this
performance audit in
accordance with generally
accepted government
auditing standards. Those
standards require that we
plan and perform the audit to
obtain sufficient, appropriate
evidence to provide a
reasonable basis for our
findings and conclusions
based on our audit objectives.
We believe that the evidence
obtained provides a
reasonable basis for our
findings and conclusions
based on our audit objectives.
The Auditor General and
staff express appreciation to
the Arizona State Board of
Physical Therapy (Board),
its Executive Director, and
staff for their cooperation and
assistance throughout the
audit.

Methodology
Auditors used various methods to study the issues in this report. These
methods included reviewing board statutes, rules, and policies and procedures;
interviewing a board member, staff, and various stakeholders; and reviewing
information from the Board’s Web site.
In addition, auditors used the following specific methods to meet its audit
objectives:

•

To assess whether the Board’s processes and practices helped ensure
that complaints are handled appropriately and in a timely manner, and
that discipline is administered in accordance with statute and rule,
auditors analyzed data from the Board’s complaint database to assess
the Board’s timeliness in resolving 157 complaints that were received
between fiscal years 2009 through 2011.1 Auditors also reviewed a
judgmental sample of 20 complaints that were received between fiscal
years 2009 through 2011, including 11 complaints filed by the public and
9 complaints opened by the Board. Auditors selected these cases to
represent public and board-opened complaints; cases that resulted in
dismissal, nondisciplinary action, and disciplinary action; and cases that
met or exceeded the 180-day complaint resolution standard.

•

To determine whether the Board’s processes and practices helped
ensure that licenses and certificates are issued in a timely manner to
qualified applicants, auditors analyzed board data for board-approved or
-denied license and certification applications that were received in fiscal
years 2011 and 2012. In addition, auditors reviewed a sample of 30
applications approved or denied during fiscal years 2011 and 2012,
including 15 that were pre-approved and 15 that were not pre-approved.
The sample included applications for both physical therapists and
physical therapist assistants and for both licensure by examination and
licensure by endorsement. Auditors also reviewed the Board’s license
application materials and a report by the Governor’s Regulatory Review
Council for fiscal year 2011 regarding the Board’s timeliness in approving
or denying licenses. Finally, auditors analyzed board data from the 2012
renewal period and issuance of business entity registrations to determine
the timeliness of those processes.

1 According to its complaint database, the Board received or opened on its own a total of 178 complaints

between fiscal years 2009 through 2011. However, auditors were able to analyze only 157 of these complaints
to assess the Board’s complaint resolution timeliness because 21 complaints had incomplete data or were still
open as of August 2012.

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•

To assess whether the Board shares appropriate information regarding licensees with the
public, auditors placed four anonymous phone calls to board staff in August and October 2012
requesting information about four licensees and compared the information provided to the
Board’s database. Auditors also reviewed licensing and complaint history information about
specific licensees on the Board’s Web site and assessed whether the information provided was
consistent with statutory requirements.

•

To obtain information used in the Introduction section, auditors compiled and analyzed
unaudited information from the Arizona Financial Information System (AFIS) Accounting Event
Transaction File for fiscal years 2010 through 2012 and the AFIS Management Information
System Status of General Ledger-Trial Balance screen for fiscal years 2010 through 2012, and
analyzed estimated fiscal year 2013 revenues and expenditures provided by board staff. In
addition, auditors reviewed board records regarding the number of licenses and certifications.

•

To obtain information used in the sunset factors, auditors reviewed the Jurisdiction Licensure
Reference Guide from the Federation of State Boards of Physical Therapy, and interviewed
representatives from professional organizations.1 In addition, to assess the Board’s compliance
with the State’s open meeting law, auditors attended three board meetings held in July through
October 2012 and reviewed the associated public meeting notices, agendas, and meeting
minutes. Auditors also tested whether board staff posted public notices and agendas for these
meetings in compliance with the open meeting law.

•

Auditors’ work on internal controls included reviewing the Board’s policies and procedures for
ensuring compliance with board statutes and rules and testing its compliance with these
policies and procedures. For example, auditors reviewed policies and procedures and tested
the Board’s compliance with various policies and procedures and/or board statutes and rules
for complaint handling, licensing and certification, and providing information to the public.
Auditors’ conclusions on these internal controls are reported in Finding 1 and the Sunset
Factors. In addition, auditors conducted data validation work to assess the reliability of the
Board’s database information used to assess complaint resolution and licensing/certification
timeliness. Specifically, auditors interviewed board staff, reviewed data policies and procedures,
and compared information in the database against electronic complaint files. Although auditors
found that, in some instances, the Board’s database contained incomplete or erroneous data,
auditors determined that the Board’s database was sufficiently reliable for the purposes of the
audit.

1 Federation of State Boards of Physical Therapy. (2011). Jurisdiction licensure reference guide: Level of autonomy. Alexandria, VA: Author.

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AGENCY RESPONSE
AGENCY RESPONSE

Performance Audit Division reports issued within the last 24 months
11-03
11-04
11-05
11-06
11-07
11-08
11-09
11-10

11-11
11-12
11-13
11-14

Arizona Department of Veterans’
Services—Fiduciary Program
Arizona Medical Board
Pinal County Transportation
Excise Tax
Arizona Department of Veterans’
Services—Veteran Home
Department of Corrections—
Oversight of Security Operations
Department of Corrections—
Sunset Factors
Arizona Department of Veterans’
Services—Veterans’ Donations
and Military Family Relief Funds
Arizona Department of Veterans’
Services and Arizona Veterans’
Service Advisory Commission—
Sunset Factors
Arizona Board of Regents—
Tuition Setting for Arizona
Universities
Arizona Board of Regents—
Sunset Factors
Department of Fire, Building and
Life Safety
Arizona Game and Fish
Commission Heritage Fund

Future Performance Audit Division reports
Registrar of Contractors

12-01
12-02
12-03
12-04
12-05
12-06

12-07
13-01
13-02

Arizona Health Care Cost
Containment System—
Coordination of Benefits
Arizona Health Care Cost
Containment System—Medicaid
Eligibility Determination
Arizona Board of Behavioral
Health Examiners
Arizona State Parks Board
Arizona State Schools for the
Deaf and the Blind
Arizona Health Care
Cost Containment
System—Medicaid Fraud and
Abuse Prevention, Detection,
Investigation, and Recovery
Processes
Arizona Health Care Cost
Containment System—Sunset
Factors
Department of Environmental
Quality—Compliance
Management
Arizona Board of Appraisal