Scathing audit of State’s ‘One-Stop Shop’ for business licensing

December 09, 2013

From Gongwer:

The Michigan Business One Stop System, developed in 2007 with the purpose of creating a single point of entry for persons and businesses doing business with state government and streamlining the licensing and permitting process, is in such woeful shape that most state departments don’t use the system, according to a scathing audit released Thursday.

The departments of Agriculture and Rural Development, Environmental Quality, Human Services, Insurance and Financial Services, Licensing and Regulatory Affairs, Natural Resources, State, Transportation and Treasury are supposed use the one-stop system. But seven of the departments do not use the system to process most of their licenses, permits and registrations.

So severe are the issues that the Department of Licensing and Regulatory Affairs, expected to use the one-stop system the most, processed only 29 licenses, permits and registrations using the system during the 2011-12 fiscal year.

At the time of the audit, LARA and Agriculture were developing new licensing and permitting systems and officials in those departments were uncertain whether the new systems should integrate with the one-stop system because they questioned if doing so would have value to the departments or their customers.

The Department of Technology, Management and Budget, which developed and implemented the one-stop system, issued a policy directing departments to integrate their processes with the system, but compliance was spotty.

Paradoxically, departmental officials told auditors that the main reasons compliance was minimal was because of the complexity of the departments’ licensing/permitting/registration processes and yet those processes were simpler for businesses to navigate than the one-stop system. Auditors urged DTMB to develop a strategic plan for the continued development and use of the one-stop system.

Individuals continue to have to submit license and permit applications separately to each responsible department and data continues to have to be re-entered on multiple systems – both issues the one-stop system was supposed to resolve, the audit found.

The state also has not evaluated whether the system is working, nor set up an effective governance structure for the system. DTMB and other departments did not assign responsibility for defining the one-stop system objectives and ensuring the achievement of those objectives.

The state spent $21.3 million to develop, implement and maintain the one-stop system from the 2007-08 fiscal year through the 2011-12 fiscal year.

The audit also found outdated content in the system.

Departments are responsible for notifying DTMB when updates are needed, but without a formal process to communicate and implement those updates, the system failed to remain current.

In a review of 31 tasks, 12 of them had outdated or inaccurate application forms. There were inaccurate application fee amounts, inaccurate department names on applications and information sought on applications that the departments no longer required.

Departments and DTMB also failed to ensure the validity of links in the one-stop system. Auditors found five of the 31 tasks had invalid links to the license search feature or the application forms.

The Department of Technology, Management and Budget said in the performance audit that it agreed with the findings and recommendations and would work to implement them. The audit reviewed the period from March 1, 2009, through July 31, 2013.

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