Chapter 2
Findings of the Appraisal Standards Review
This chapter of the report addresses findings and recommendations from the appraisal standards review of the Nolan CAD in five sections:
2.1
Governance and Management
The quality of the property tax system depends largely on the appraisal district's board of directors (board). The board should provide knowledge, judgment and expertise in establishing policies and procedures for the appraisal district's organization and operation.
The Nolan CAD's board consists of five members listed in Exhibit 6. Since the appraisal district collects for all taxing entities including the county, the county tax assessor-collector does not perform collection duties for any of the entities in Nolan CAD and does not serve on the board.
Exhibit 6
Nolan CAD Board of Directors Members
| Board Member |
Entity Member Represents |
Start Date | Occupation |
Elected Official (Yes or No) |
|---|---|---|---|---|
| Ben High, Chair | At-large | Jan 1999 | Retired Principal | No |
| Dr. Michael Wedin | At-large | Jan 1999 | Dentist | No |
| Ronald Kinsey | At-large | Jan 1999 | Business Owner | No |
| Linda Edwards | At-large | Jan 2003 | TXU Retiree | No |
| Walter Sweet | At-large | Jan 2003 | Gov. Consultant | No |
Source: Nolan CAD, December 2005.
The board has the following primary responsibilities:
- establish the appraisal district's appraisal office;
- adopt the appraisal district's annual operating budget;
- approve appraisal contracts;
- hire a chief appraiser;
- hire a taxpayer liaison officer (in counties with a population of more than 125,000);
- appoint appraisal review board members; and
- set general policy on the appraisal district's operation.
The Comptroller's office asked the board to complete a written survey about its activities. All five of the board members responded. The survey gathers data on board policies and procedures; the chief appraiser and staff; property appraisals; appraisal review boards; and budgeting and financial management. The five board members who responded gave Nolan CAD high marks and they did not identify any problems.
Section 6.06 of the Tax Code requires an appraisal district to list in its budget:
- each proposed position with associated salary and benefits;
- each proposed capital expenditure; and
- an estimate of the amount of the budget allocated to each taxing unit.
FINDING
The Nolan CAD budget does not demonstrate that resources are being dedicated to critical appraisal functions and the budget is not linked to board-approved goals and objectives or to a reappraisal plan.
Each year, the chief appraiser prepares a budget and presents it to the board for approval.
The CAD board has not set goals or related objectives for the district and has done no strategic planning. The board has adopted a reappraisal plan, but the plan does not contain the level of detail needed to determine the amount and type of budget resources that will be needed to carry out the plan or effectively or efficiently operate the CAD. In responding to the IAAO Self-Evaluation Questionnaire, the Nolan CAD indicated two areas of concern, including the diverse classes of properties to appraise and its mass appraisal software and the need for mapping integration. Property diversity is sometimes addressed by hiring or contracting for additional appraisal expertise, however, the budget for external contractors has been virtually unchanged over the last three years. The budgets for the last three years do indicate additional resources being dedicated to data processing, however the dollar amount budgeted for mapping supplies is unchanged The overall budget for salaries has increased, but personnel records do not indicate that any new appraisal staff have been hired to handle the diverse properties. Therefore, it is difficult to see how the budget or the budget development process, which IAAO suggests should begin with strategic planning, is being used by the board as a tool for addressing the most pressing needs of the CAD, and thereby providing accurate and consistent appraisal of properties in Nolan CAD.
Because the Nolan CAD also collects taxes for all of the 10 taxing units that it provides appraisal service for, the Nolan CAD maintains two separate budgets, one for collections and one for appraisal. As shown in Exhibit 7, the appraisal budget for salaries has increased by 19.46 percent over the last three years.
Exhibit 7
Nolan CAD Adopted Appraisal Budgets (2004-06)
REVENUE
| 2004 Budget | Percent | 2005 Budget | Percent | 2006 Budget | Percent | Percent Increase (Decrease) 2004-06 | |
|---|---|---|---|---|---|---|---|
| Taxing Unit Revenue | $365,250 | 96.77% | $384,750 | 97.37% | $415,510 | 97.31% | 13.76% |
| Interest | 8,200 | 2.17% | 8,200 | 2.08% | 4,500 | 1.05% | (45.12%) |
| Misc. Revenue | 4,000 | 1.06% | 2,200 | 0.56% | 7,000 | 1.64% | 75% |
| TOTAL REVENUE | $377,450 | 100% | $395,150 | 100% | $427,010 | 100% | 13.13% |
EXPENSES
| 2004 Budget | Percent | 2005 Budget | Percent | 2006 Budget | Percent | Percent Increase (Decrease) 2004-06 | |
|---|---|---|---|---|---|---|---|
| Appraisal Engineers | $50,500 | 13.38% | $52,000 | 13.16% | $52,000 | 12.18% | 2.97% |
| Automobile Expense | 7,000 | 1.85% | 7,000 | 1.77% | 7,000 | 1.64% | 0.00% |
| Board of Directors | 1,200 | 0.32% | 1,200 | 0.30% | 1,200 | 0.28% | 0.00% |
| Appraisal Review Board | 5,000 | 1.32% | 3,000 | 0.76% | 3,000 | 0.70% | (40.00%) |
| Capital Replacement: Auto | 3,600 | 0.95% | 3,600 | 0.91% | 3,600 | 0.84% | 0.00% |
| Capital Replacement: Equip | 3,500 | 0.93% | 3,500 | 0.89% | 3,500 | 0.82% | 0.00% |
| Capital Replacement: Property | 2,500 | 0.66% | 1,500 | 0.38% | 1,500 | 0.35% | (40.00%) |
| Computer Supplies | 6,000 | 1.59% | 6,000 | 1.52% | 6,000 | 1.41% | 0.00% |
| Data Processing | 8,000 | 2.12% | 21,000 | 5.31% | 21,000 | 4.92% | 162.50% |
| Dues/Subscriptions | 6,000 | 1.59% | 6,000 | 1.52% | 6,000 | 1.41% | 0.00% |
| Insurance | 4,000 | 1.06% | 4,000 | 1.01% | 4,000 | 0.94% | 0.00% |
| Legal Notices | 3,000 | 0.79% | 3,000 | 0.76% | 3,000 | 0.70% | 0.00% |
| Maint. Contracts | 3,500 | 0.93% | 3,500 | 0.89% | 3,500 | 0.82% | 0.00% |
| Mapping Supplies | 3,000 | 0.79% | 3,000 | 0.76% | 3,000 | 0.70% | 0.00% |
| Health Insurance | 23,000 | 6.09% | 30,500 | 7.72% | 30,500 | 7.14% | 32.61% |
| Medicare | 13,200 | 3.50% | 13,400 | 3.39% | 15,470 | 3.62% | 17.20% |
| Retirement | 12,100 | 3.21% | 12,300 | 3.11% | 14,150 | 3.31% | 16.94% |
| Salaries | 169,200 | 44.83% | 175,200 | 44.34% | 202,120 | 47.33% | 19.46% |
| Longevity | 3,000 | 0.79% | 3,000 | 0.76% | 3,520 | 0.82% | 17.33% |
| Unemployment | 1,100 | 0.29% | 1,100 | 0.28% | 1,100 | 0.26% | 0.00% |
| Worker's Comp. | 1,800 | 0.48% | 1,800 | 0.46% | 2,300 | 0.54% | 27.78% |
| Postage & Delivery | 3,000 | 0.79% | 6,000 | 1.52% | 6,000 | 1.41% | 100.00% |
| Professional Fees | 12,000 | 3.18% | 7,300 | 1.85% | 7,300 | 1.71% | (39.17%) |
| Rental Office Equip. | 5,000 | 1.32% | 5,000 | 1.27% | 5,000 | 1.17% | 0.00% |
| Equipment Repairs | 750 | 0.20% | 750 | 0.19% | 750 | 0.18% | 0.00% |
| Building Repairs | 0 | 0.00% | 1,000 | 0.25% | 1,000 | 0.23% | 0.00% |
| Supplies | 8,500 | 2.25% | 4,000 | 1.01% | 4,000 | 0.94% | (52.94%) |
| Telephone | 4,000 | 1.06% | 5,000 | 1.27% | 5,000 | 1.17% | 25.00% |
| Tuition/Training | 5,000 | 1.32% | 1,500 | 0.38% | 1,500 | 0.35% | (70.00%) |
| Utilities | 9,000 | 2.38% | 9,000 | 2.28% | 9,000 | 2.11% | 0.00% |
| TOTAL EXPENSES | $377,450 | 100% | $395,150 | 100% | $427,010 | 100% | 13.13% |
Source: Nolan CAD Board of Directors Minutes and Budget Documents.
As noted earlier, personnel records provided by the CAD show that all of the appraisal staff have been with the CAD for a number of years. The only new employee shown in the records is a collections clerk, yet the 2006 collections budget for salaries has risen by only 1.13 percent as shown in Exhibit 8.
Exhibit 8
Nolan CAD Adopted Collections Budgets (2004-06)
REVENUE
| 2004 Budget | Percent | 2005 Budget | Percent | 2006 Budget | Percent | Percent Increase (Decrease) 2004-06 | |
|---|---|---|---|---|---|---|---|
| Taxing Unit Rev. | 203,500 | 91.89% | 203,950 | 88.06% | 207,170 | 90.65% | 1.80% |
| Interest | 2,800 | 1.26% | 4,800 | 2.07% | 3,500 | 1.53% | 25.00% |
| Misc. Revenue | 15,150 | 6.84% | 13,000 | 5.61% | 8,000 | 3.50% | (47.19%) |
| Fees | 0 | 0.00% | 9,860 | 4.26% | 9,860 | 4.31% | 0.00% |
| TOTAL REVENUE | $221,450 | 100% | $231,610 | 100% | $228,530 | 100% | 3.20% |
EXPENSES
| 2004 Budget | Percent | 2005 Budget | Percent | 2006 Budget | Percent | Percent Increase (Decrease) 2004-06 | |
|---|---|---|---|---|---|---|---|
| Automobile Exp. | 1,500 | 0.68% | 1,500 | 0.65% | 1,500 | 0.66% | 0.00% |
| Board of Directors | 300 | 0.14% | 300 | 0.13% | 300 | 0.13% | 0.00% |
| Capital Replacement: Auto | 1,500 | 0.68% | 1,500 | 0.65% | 1,500 | 0.66% | 0.00% |
| Capital Replacement: Equipment | 2,000 | 0.90% | 2,000 | 0.86% | 2,000 | 0.88% | 0.00% |
| Capital Replacement: Property | 2,500 | 1.13% | 1,500 | 0.65% | 1,500 | 0.66% | (40.00%) |
| Computer Supplies | 6,000 | 2.71% | 6,000 | 2.59% | 6,000 | 2.63% | 0.00% |
| Data Processing | 8,500 | 3.84% | 18,860 | 8.14% | 18,860 | 8.25% | 121.88% |
| Dues/Subscriptions | 400 | 0.18% | 400 | 0.17% | 400 | 0.18% | 0.00% |
| Insurance | 3,500 | 1.58% | 3,500 | 1.51% | 3,500 | 1.53% | 0.00% |
| Legal Notices | 5,000 | 2.26% | 5,000 | 2.16% | 5,000 | 2.19% | 0.00% |
| Maint. Contracts | 3,200 | 1.45% | 3,200 | 1.38% | 3,200 | 1.40% | 0.00% |
| Mapping Supplies | 1,000 | 0.45% | 1,000 | 0.43% | 1,000 | 0.44% | 0.00% |
| Health Insurance | 15,300 | 6.91% | 20,300 | 8.76% | 20,300 | 8.88% | 32.68% |
| Medicare | 8,800 | 3.97% | 9,000 | 3.89% | 8,500 | 3.72% | (3.41%) |
| Retirement | 8,100 | 3.66% | 8,200 | 3.54% | 7,990 | 3.50% | (1.36%) |
| Salaries | 112,800 | 50.94% | 116,800 | 50.43% | 114,080 | 49.92% | 1.13% |
| Longevity | 2,000 | 0.90% | 2,000 | 0.86% | 1,920 | 0.84% | (4.00%) |
| Unemployment | 700 | 0.32% | 700 | 0.30% | 700 | 0.31% | 0.00% |
| Worker's Comp. | 1,100 | 0.50% | 1,100 | 0.47% | 1,530 | 0.67% | 39.09% |
| Postage & Delivery | 6,500 | 2.94% | 6,500 | 2.81% | 6,500 | 2.84% | 0.00% |
| Professional Fees | 8,000 | 3.61% | 5,000 | 2.16% | 5,000 | 2.19% | (37.50%) |
| Rental Office Equip | 3,000 | 1.35% | 3,000 | 1.30% | 3,000 | 1.31% | 0.00% |
| Equipment Repairs | 750 | 0.34% | 750 | 0.32% | 750 | 0.33% | 0.00% |
| Building Repairs | 0 | 0.00% | 1,000 | 0.43% | 1,000 | 0.44% | 0.00% |
| Supplies | 8,000 | 3.61% | 1,500 | 0.65% | 1,500 | 0.66% | (81.25%) |
| Telephone | 1,500 | 0.68% | 500 | 0.22% | 500 | 0.22% | (66.67%) |
| Tuition/Training | 500 | 0.23% | 1,500 | 0.65% | 1,500 | 0.66% | 200.00% |
| Utilities | 9,000 | 4.06% | 9,000 | 3.89% | 9,000 | 3.94% | 0.00% |
| TOTAL EXPENSES | $221,450 | 100% | $231,610 | 100% | $228,530 | 100% | 3.20% |
Source: Nolan CAD Board of Directors Minutes and Budget Documents.
Section 6.06(d) requires the participating units to fund the CAD's budget based on their levy percentage. Because the "budget" discussed in the statute is the budget for providing appraisal rolls to each unit, funds needed for collections costs, which are not part of the function of providing appraisal rolls and which all of the units may not employ the CAD as a collector, should be separate from the CAD's main budget. The chief appraiser stated that she felt her budget was in compliance with Tax Code Section 6.06 because her financial auditor and an attorney had advised her that they were in compliance. While recognizing that the appraisal district has received this advice, the CAD's budget does not comply with the format outline in the code, which says that an individual salary and benefits will be associated with each position in the budget.
Because the budget does not contain the statutorily required listing of the salaries and benefits by position, neither the board nor the taxing units or the public can determine from the budget document whether the appraisal salary increase resulted because of pay raises or the hiring of additional staff or whether the CAD has placed the collections clerk position into the appraisal budget in error. Further, it is unclear from the budget, which positions or portions of positions are allocated to the appraisal function and which are allocated to the collections function.
Longevity pay is also shown in the budget as a lump sum. According to Exhibit 9, the 2006 longevity pay for the two collections clerks is $180, yet the collections budget indicates $1,920 as being budgeted for 2006.
Exhibit 9
Nolan CAD Salary Schedule 2006
| Position | Salary | Longevity Pay |
|---|---|---|
| Chief Appraiser | $62,366.12 | $1,365.00 |
| Senior Appraiser | $43,029.52 | $740.00 |
| Administrative Assistant | $35,907.75 | $390.00 |
| Map/Deed Technician | $34,472.97 | $1,165.00 |
| Appraiser | $32,864.00 | $180.00 |
| Appraiser | $30,000.00 | $60.00 |
| Data Processor | $25,475.31 | $1,380.00 |
| Collections Clerk | $24,000.00 | $0.00 |
| Collections Clerk | $19,398.49 | $180.00 |
Source: Nolan CAD Board of Directors Minutes and Budget Documents.
Adding in 100 percent of the longevity pay for the only two positions that are not specifically identified as appraisers, appraisal supervisors or appraisal technicians, the data processor ($1,380) and the administrative assistant ($390), brings the total to $1,950, slightly more than what is budgeted.
According to Section 6.27 of the Tax Code, "...the county assessor-collector is entitled to a reasonable fee, which may not exceed the actual costs incurred, for assessing and collecting taxes for a taxing unit pursuant to Section 6.23(a)(1), (2), or (3)." Therefore, if an incorrect amount is being allocated to either the collections or the appraisal function, the participating taxing units could be paying an incorrect amount, and critical resources needed for those functions, could be inadvertently diverted from their intended use.
According to IAAO, assessment office managers engage in three types of planning: 1) strategic planning, 2) annual work planning, and when necessary, 3) project planning. Plans lay the foundation for budget requests. As a result of the Nolan CAD's lack of planning, as well as its failure to comply with the statutory requirements outlined in Section 6.06 of the Tax Code, the Nolan CAD is unable to demonstrate that resources are being dedicated to meet critical appraisal functions.
RECOMMENDATION 1
Begin the budget cycle with board-level planning, and comply with the Tax Code by expanding the budget format to make certain that resources are appropriately dedicated to critical appraisal functions.
FINDING
The Nolan CAD board of directors has not adopted local policies or procedures.
The Nolan CAD's board has not adopted local board policies or procedures, but instead uses the Appraisal District Director's Manual published by the Comptroller, which is generic in nature and is designed only as a guideline for appraisal districts to use in developing local policies and procedures. All board members strongly agreed with the statement on the board of directors' survey, "The board maintains a comprehensive, well-documented set of policies and procedures to guide the operation of the appraisal district." The chief appraiser, on the other hand, noted that the board of directors lacks any written policies and procedures. As an example, the chief appraiser indicated the board elects officers and documents this in the minutes of the board of directors' meetings.
Minutes from the board of directors' meeting on March 15, 2005 indicate a motion was carried to appoint a member to the Appraisal Review Board. The motion was rescinded two months later due to a conflict of interest regarding the member's employment by one of the taxing units. The minutes state that the board did not know this fact at the time of the member's appointment. If the board had written policies and procedures to detail the steps for appointments of members to the Appraisal Review Board this problem could have been avoided.
The chief appraiser indicated that the board knows its three primary responsibilities and uses the Comptroller's Appraisal District Director's Manual. The manual lists 10 primary responsibilities for a board. However, the Comptroller's Appraisal District Director's Manual is intended for use in developing local policies and procedures and not to be used as a standalone manual.
Section 6.04 (d) Tax Code states that the board shall develop and implement policies. Section 6.04 (e) requires the board to prepare and maintain a written plan and Section 6.04 (f) states that the board shall prepare information of public interest and it shall be available to the public and to the taxing entities. Using only the Comptroller's Appraisal District Director's Manual does not meet these conditions and leaves the public as well as the taxing entities without specific information required by the Tax Code.
By adopting local policies, an appraisal district's board of directors can define its appraisal district's goals. Local policies provide the current and future board guidance and assistance in managing the CAD as well as for decision-making purposes. A comprehensive policy manual allows board members to plan and discuss decisions well in advance, instead of when an issue or problem arises.
For example, Jefferson CAD's Board of Directors' Policy Manual represents an effective tool in addressing local managerial and administrative issues when the board clearly defines, among other things, the chain of command in CAD operations in Section 2: Powers and Duties of the Chief Appraiser.
Notable items in this section of the board Policy Manual are: § 2-03.01 "The Chief Appraiser is responsible for the preparation of the Appraisal District's budget"; § 2-03.03 "The Chief Appraiser supervises the work of the contractors such as appraisal firms, computer services, etc.," § 2-04.01 "The Chief Appraiser keeps the board informed on the operation and progress of the Appraisal District and assists in development of operational policies and procedures;" and § 2-05.02 "The board of directors will conduct an evaluation of the Chief Appraiser's job performance on an annual basis. The evaluation will be submitted to the chief appraiser in executive session at the August regular board of directors meeting each year."
The statutory responsibilities of the appraisal district and its board of directors are varied. By developing a written manual of the board's policies and procedures, Nolan CAD will have a resource that will help the public better understand how the board of directors operates, and will create a process that will explain the procedures.
RECOMMENDATION 2
Develop a comprehensive board of directors' policy manual that defines the appraisal district's goals and guides the appraisal process.
FINDING
The Nolan CAD board of directors does not perform an annual written performance evaluation of the chief appraiser.
All respondents to the Board Survey indicated on their questionnaire that they annually evaluate the chief appraiser and formally document the process. However, the chief appraiser indicated that there are no written evaluations but that the board of directors is actively involved and is constantly evaluating the appraisal district.
The chief appraiser has been with the appraisal district since its inception in 1980, with the exception of a two-year hiatus from 1992-94. The chief appraiser indicated that the board is aware of appraisal district operations, including the chief appraiser's performance. The board of directors meets monthly, except when the Appraisal Review Board is in session.
The chief appraiser advises that the board evaluates her performance at each meeting and lets the chief appraiser know its feelings and documents any dissatisfaction in the minutes. The 2004 and 2005 board minutes note no dissatisfaction with the chief appraiser and do not address any specific aspects of the chief appraiser's performance. Written evaluations, of course, address both successes and areas that need improvement and provide documentation of a chief appraiser's overall performance.
Without a written evaluation based on measurable performance criteria neither the chief appraiser, the board, nor the public has any documentation of performance progress towards the appraisal district's goals. Written evaluations based on performance standards also provide a concrete basis for employee performance incentives, demotions or releases.
Jefferson CAD, for example, has a model for a functional evaluation instrument. This particular evaluation instrument allows for input from all board members and affords the chief appraiser an opportunity to address professional goals and objectives during the performance evaluation in executive session. Having an objective evaluation system in place ensures that the board of directors and the chief appraiser have a mutual understanding as to what they expect of the chief appraiser. It also eliminates performance evaluations that may be subjective rather than objectively evaluating actual performance.
The Comptroller's Board of Director's Manual contains only minimal generic requirements and as stated previously, is intended as a guideline for the development of local documents. The manual does not include an evaluation list for the chief appraiser. Since the chief appraiser duties listed in the manual are not all-inclusive, the chief appraiser's job description and contract needs to be tied to the evaluation, so the board can develop their own local evaluation for the chief appraiser.
The manual does state that the chief appraiser must know about the board's goals and policies to implement them and the directors need to know from the chief appraiser about the CAD's operations to ensure that the chief appraiser is implementing their policies and working to achieve their goals. With the board annually evaluating the chief appraiser in writing, the chief appraiser will be able to fully understand board requirements and improve CAD performance as well as act on the wishes of the board regarding implementation of board policies.
RECOMMENDATION 3
Develop, perform and document an annual performance evaluation of the chief appraiser.
2.2
Generally Accepted Appraisal Practices
There are three general appraisal methods or approaches-cost, income and market-that a chief appraiser must consider in determining a property's market value. The chief appraiser must use the method most appropriate in appraising a particular property.
Appraisal textbooks may offer additional information about the approaches to determining or appraising value. Appraisers usually determine the value of producing mineral deposits-such as oil, gas and coal-and the value of many utility and commercial properties by using the income approach to value. Most appraisal districts contract with consultants to appraise mineral and utility properties. The chief appraiser can provide information concerning the method used to appraise mineral and utility properties.
FINDING
Nolan CAD has not prepared a sufficient reappraisal plan to ensure the execution of timely and accurate reappraisals.
The appraisal district has a one-page reappraisal plan that outlines steps followed by the appraisal district. In summary, the CAD is divided into thirds, with one-third of the CAD being reappraised each year. The plan describes the areas to be reappraised in the CAD each year. Other sections of the plan state the CAD will annually reappraise all mobile homes, new discoveries, personal property and rendered property. The chief appraiser related that the appraisal district will check sales annually and reappraise if the sales ratio indicates a need for reappraisal. The chief appraiser indicated the appraisal district staff determines the properties to be reappraised annually and believes the appraisal district is able to stay abreast of property transaction activities in the county due to its relatively small size.
The basic order of reappraisal is: Group One - Blocks 19, 20 & 21; Group Two - Blocks 22, 23 & 24; and Group Three - Block 64, Fisher County including the balance of Nolan County. The Nolan CAD reappraisal plan does not address areas of the appraisal district where reappraisals may not have occurred for up to three years. A review of the current in-house ratio study indicates that the appraisal district uses sales dating from 2002. Appraisers prepare a complete ratio study and submit it to the chief appraiser, who then reviews the study. The chief appraiser adjusts market areas and neighborhoods. The chief appraiser does not actually change an appraisal schedule but applies an adjustment factor where needed.
Tax Code Section 25.18 on periodic reappraisal and reappraisal plans that
(b) The plan shall provide for the following reappraisal activities all real and personal property in the district at least once every three years:
- identifying properties to be appraised through physical inspection or by other reliable means of identification, including deeds or other legal documentation, aerial photographs, land-based photographs, surveys, maps, and property sketches;
- identifying and updating relevant characteristics of each property in the appraisal records;
- defining market areas in the district;
- identifying property characteristics that affect property value in each market area, including:
- developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area and determines the contribution of individual property characteristics;
- applying the conclusions reflected in the model to the characteristics of the properties being appraised; and
- reviewing the appraisal results to determine value.
After the onsite visit, the chief appraiser submitted a new reappraisal plan to the board of directors. The plan uses a 40-page template for a "Sample Mass Appraisal Report" from the Texas Association of Assessing Officers Website. Although useful in some aspects, the template is generic and does not explain exactly how and when Nolan CAD will execute the steps to the reappraisal plan or how it will allocate sufficient resources for implementing the plan.
For example, in the "Introduction" to the section on "Residential Valuation Process, Scope of Responsibility," the chief appraiser omitted the number of parcels for Categories A, B, C on page 10 of the reappraisal plan. A reappraisal plan that lacks the number of parcels to be reappraised is not a project map for performing the work and it does not show an appraisal district's board of directors how and when the appraisal staff will accomplish the project.
Section 23.01, Tax Code, requires all property be appraised at market value. IAAO states that frequent reappraisals, especially where property values are changing rapidly, may be essential to fair distribution of the property tax.
According to the USPAP Standard 6 and Section 25.18, Tax Code, a reappraisal plan recommends the following activities:
- identifying properties to be reappraised;
- identifying and updating in the appraisal records the relevant characteristics of each property to be appraised;
- defining market areas;
- identifying property characteristics that affect property value in each market area;
- developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area;
- calibrating the model to determine the contribution of the individual property characteristics affecting value;
- applying the conclusions reflected in the model to the characteristics of the properties being appraised; and
- reviewing the appraisal results.
Lack of a sufficient reappraisal plan could compromise the successful execution of the reappraisal and result in property values that deviate from market value. This market value deviation could cause any of Nolan CAD's school districts to receive an invalid finding in the state's property value study.
Sections 6.05(i) and 25.18(b) of the Tax Code were recently amended to require appraisal districts to develop biennially a written reappraisal plan approved by the board of directors by September 15, 2006. Section 6.05(i) of the Tax Code states that a public hearing must be held to consider the plan. The plan must provide for the reappraisal of all real and personal property in the appraisal district at least once every three years. A reappraisal plan is a project map for performing the work. It is a public relations tool that shows an appraisal district's board of directors, taxing units and taxpayers how the appraisal district staff plans to accomplish its appraisals. The success of a reappraisal plan depends on the CAD's ability to educate other public officials and county residents concerning the reappraisal and how it will appraise properties equitably and according to the Tax Code.
In Jefferson CAD, for example, the reappraisal plan is a part of the appraisal district's policy and procedures manual and was adopted by the board of directors. The reappraisal plan process provides details of the steps to be performed, staffing levels required, workflow and the costs associated with plans and objectives. The plan lists specific procedures for determining how sales should be used in reappraising property in each market area, and how the appraisal district's internal ratio study should be used to determine the need for reappraisal in each market area. The plan also provides procedures for grouping market areas to provide sufficient sales for appraisal model analysis and development.
RECOMMENDATION 4
Adopt a detailed reappraisal plan that includes the critical steps in the process (Section 25.18, Tax Code), explains exactly how and when the steps will be executed and explains how sufficient resources will be allocated to implement the plan.
FINDING
Nolan CAD lacks an updated and comprehensive appraisal procedures manual for staff to follow.
The appraisal district relies on a collection of documents, memos and manuals.
The appraisal district provided a document entitled "Central Appraisal District of Nolan County USPAP Standards Rule 6-7." The primary purpose of this document is "to guide and help individuals understand the appraisal methods used to maintain more efficiently and with greater consistency the appraisals of properties for ad valorem tax purposes." The document describes the different appraisal techniques, the tax system, administration and the analysis or definition of appraisal district properties. The report goes on to show examples of the different types of appraisal techniques and how they apply to different types of properties, including real, personal, commercial or industrial. The last revision of this document appears to be in 2002.
The appraisal district also has an appraisal procedures manual that the chief appraiser and staff are developing. The appraisal district has relied on Marshall & Swift cost handbooks for residential and commercial properties. The CAD has several long-term employees, including the chief appraiser, who rely on their own personal knowledge of the appraisal district and market area.
In addition, the CAD has other in-house documents and procedures that staff follows. By combining all information in the appraisal district and developing local property classification guides and descriptions, the appraisal district will experience an easier transition when staff changes occur or training of new personnel has to take place.
Not having detailed appraisal procedures manuals can cause a lack of uniformity in appraisals and result in property values that deviate from market value. If the level of appraisal, ratio of local value to market value, varies from school district to school district, or from taxpayer to taxpayer, the local tax burden can become inequitably distributed.
Section 23.01 of the Tax Code mandates that property be appraised by applying generally accepted appraisal methods and techniques. This section also requires appraisal districts to comply with USPAP if the appraisal district uses mass appraisal standards. It requires similar appraisal methods and techniques be applied to the same or similar properties, while considering individual property. A comprehensive appraisal procedures manual ensures the adherence by CAD appraisers to these standards and procedures as well as using all three approaches to value.
Another peer appraisal district, for example, has effectively produced an up-to-date appraisal manual. The Tom Green County Appraisal District Appraisal Manual explains how the CAD appraises residential and commercial property, business personal property, and land. The manual also contains the CAD's USPAP Mass Appraisal Report.
As part of this CAD's computerized model, appraisal staff use cost-based schedules to appraise residential and commercial improvements. Updated in 2005, the residential schedules are included in the appraisal manual. Procedures for analyzing sales and market data are likewise contained in the Tom Green County Appraisal District Appraisal Manual. Verified sales within the same property category are appraised using existing cost tables. The resulting appraisals are compared to the market sales and adjustment factors are calculated to bring the appraisals more in line with the sales. The CAD developed a residential classification guide to promote uniformity and consistency among the appraisers in the way they classify residential properties.
By issuing an appraisal procedures manual to each appraisal staff member, the CAD's work of appraising property can be more efficient and appraisal equality could be improved. A functional appraisal procedures manual would contain, but not be limited to, the following: local procedures and practices for each type of property the staff appraises, property classification descriptions and examples, directions for gathering and processing property characteristics, and directions for reviewing and evaluating appraised values through internal ratio studies.
RECOMMENDATION 5
Complete the process of developing and updating the appraisal procedures manual and update and maintain existing documents.
2.3
Resources and Management
In organizing and administering a county appraisal district, the chief appraiser is responsible for hiring, firing and training personnel, for ensuring compliance with a wide range of legal requirements, and for maintaining policies and procedures for the effective operation of the appraisal district.
The profile of the Nolan CAD staff is in Exhibit 10.
Exhibit 10
Nolan CAD Positions, Certifications,
Years with Nolan CAD and Salaries
| Position | BTPE Certification(s) | Years with CAD | Salary |
|---|---|---|---|
| Chief Appraiser | RPA, RTA | 21 1/2 | $62,366 |
| Sr. Appraiser | RPA | 12 | $43,029 |
| Appraiser | Class III Appraiser | 3 | $32,864 |
| Mapping | None | 19 | $34,472 |
| Data Processing | None | 23 | $25,475 |
| Administration | RPA, RTA | 8 | $35,907 |
| Collections Supervisor | Application with BTPE | 2 Months | $24,000 |
| Clerk | None | 3 | $19,518 |
Source: Nolan CAD, December 2005.
Appraisal district employees who conduct appraisals must be registered professional appraisers (RPAs) or be working towards certification as an RPA; the latter must be certified within five years of their hire date. Interim certifications include Class II and Class III. In addition, RPAs must recertify every five years to remain registered. All Nolan CAD appraisers are professionally certified.
FINDING
Nolan CAD does not have procedures in place to maintain or monitor its contracts and agreements for compliance with IAAO Standard on Contracting for Assessment Services or provisions of Chapters 116 and 252 of the Local Government Code.
Without centrally administered contracts or agreements or any written contract monitoring procedures on which the Nolan CAD staff may rely, future or reassigned CAD personnel may not be aware of the guidelines for ensuring that the contractor delivers contracted goods or services on time and that the quality and quantity are in accordance with the contract.
The appraisal district has contracts for outsourced minerals appraisal services, computer/software services, depository agreements and collection services. The appraisal district supplied sample contracts for appraisal software (Beyond Appraisal Inc.), appraisal services (Pritchard & Abbott Inc.), and bank depository (Roscoe State Bank). The appraisal district also contracts for legal services with Perdue, Brandon, Fielder, Collins & Mott, LLP for delinquent tax collection.
Nolan CAD signed the bank depository contract with Roscoe State Bank (Roscoe) on December 14, 2005. The contract is for a term of two years, beginning January 1, 2006 and ending December 31, 2007. The appraisal district provided evidence that it solicited other competitive bids from Texas National Bank and First National Bank. Roscoe's depository contract agrees to match the U.S. T-Bill rate on Nolan CAD's certificates of deposit, pay the published rate for NOW Accounts on the appraisal district's demand deposits with a minimum guaranteed rate of 2.75 percent per annum, extend loans to the appraisal district in the form of net overdrafts or notes at a rate of 1 percent below prime as published in The Wall Street Journal, and charge no fees for virtually all banking services except stop payments and NSF items. The bank agrees to guarantee the CAD's deposits either with a bond or by pledging "Approved Securities" in the manner prescribed by law. Contracts were not available for the tax collection firm or the taxing entities. Exhibit 11 presents a financial summary of other professional services contracts.
Exhibit 11
Nolan CAD
Professional Service Contracts
| Contract | Written (Yes or No) | Key Terms and Conditions |
2004 Budget |
2004 Actual |
2005 Budget |
2005 Actual |
2006 Budget |
2006 Actual |
|---|---|---|---|---|---|---|---|---|
| Pritchard & Abbott, Inc. | Yes | Professional Appraisal Services | $50,500 | $50,500 | $52,000 | $52,000 | $52,000 | $52,000 |
| Capitol Appraisal Group, Inc. | Yes | Software license and services agreement | $23,200 | $20,665 | $46,560 | $30,000 | ||
| Beyond Appraisal, Inc. | Yes | Software license and services agreement | $0 | $30,800 | $46,560 | $64,200 |
Source: Nolan CAD, December 2005.
On September 8, 2005, Nolan CAD entered into a software license and services agreement with Beyond Appraisal Inc. ("BAI") for procurement of a mass appraisal software system, the total amount of which was $77,000. The contract calls for 40 percent to be paid at signing, 30 percent due by January 1, 2006 and a final 30 percent due upon completion. The CAD also has agreed to pay an additional $3,000 per month, beginning three months after installation is complete, for ten consecutive months for maintenance and technical support services to be rendered to the CAD. Assuming the target project completion date of February 1, 2006, the CAD will have incurred $64,200 of data processing, computer supplies and maintenance contract expenses for fiscal 2006, an amount cumulatively under-reported in the 2006 adopted budgets, both appraisal and collections (i.e., two 30-percent payments for the $77,000 contract amount, and six months of the agreed maintenance and technical support services fee).
The Nolan CAD chief appraiser indicated that the CAD did not conduct a formal bidding process for procuring the software system as mandated under Section 6.11 of the Tax Code and Chapter 252 of the Local Government Code. After the onsite visit, the chief appraiser related that, while it did not use a sealed proposal procedure, the CAD contacted other vendors for proposals for converting their appraisal software system to the new software. The appraisal district, however, did not provide evidence of any proposals or comparative analysis of bids.
Not following the process of requesting competitive sealed bids or proposals for a procurement item in excess of $25,000 deprives the CAD the chance to carefully conduct a thorough cost-benefit analysis of a potential purchase. This can result in not finding the most economical services. Purchases can be evaluated not just on price alone, but on cost and financing terms, delivery schedule, design and maintenance, quality of service and the vendor's qualifications and reputation.
Highland ISD was deemed an eligible school district in the 2004 PVS due, in part, to an inaccurate appraisal of TXU Fuel Company at 34 percent of market value. This was a significant factor in the school district's local value falling outside the confidence interval despite a formal appeal. During this appeal, the school district's attorney argued for the removal of the appraisal of TXU Fuel from the 2004 PVS in Highland ISD "because the appraisal district conducted its appraisal based on erroneous assumptions or faulty or misleading information provided by the former agents of the owners of the property."
If the CAD used an efficient process for monitoring its contracts, the possibility of the erroneous appraisal could have been reduced.
An effectively written procedure identifies who monitors the contract and the duties that are performed under each contract. Without formal contract monitoring, the appraisal district is unable to monitor that it received the quality or quantity of services specified for delivery, as rendered by the contractor.
The chief appraiser indicated that Nolan CAD monitors contracted appraisal services performed by private appraisal firms, but has not prepared a written policy for ensuring that contracted services are performed satisfactorily. She also related that the contracted appraisal firm presents its appraisal procedures to the board, staff and the taxing units every two years so that the stakeholders can understand the appraisal firm's processes and procedures.
The IAAO Standard on Contracting for Assessment Services, Section 5, recommends contracts have specific provisions, including the timeframes when services or goods will be delivered, payment provisions, required documentation and termination rights. Contract provisions express the legal obligations of all parties with respect to any project.
Without contract monitoring, the CAD cannot make a decision on the quality of services rendered by the contractor.
For example, Hansford CAD, has an excellent process for managing and monitoring contracted services. Hansford CAD successfully prepares, manages and monitors its contracts while meeting IAAO contracting standards. The deputy chief appraiser and chief appraiser act as contract monitors for all contracts except the chief appraiser's, which is managed directly by the board. CAD management routinely reviews vendor performance and contract terms, requesting bids for services when needed to ensure receiving the best value at a reasonable cost. The CAD's adopted process ensures timely receipt of quality deliverables and timely payment according to contract terms.
RECOMMENDATION 6
Develop written policies and procedures for managing the contract process, and comply with the procedures for competitive sealed bids and proposals.
2.4
Information Processing and Data Collection
Computers have become a necessity for all appraisal districts. Computers allow the appraisal district to amass large amounts of data, perform complex tasks that otherwise would take hundreds of staff hours to perform manually and more precisely analyze trend data to ensure accurate valuation of similar properties.
Technology infrastructure is the underlying system of cabling, phone lines, hubs, switches, routers and other devices that connect the various parts of an organization through a wide area network (WAN) and through a series of local area networks (LANs). Maintaining a strong infrastructure and integrating the various systems used by the appraisal district are critical to increased staff productivity, fewer costly data errors and better customer service to the users, community members and the taxing units dependent on the appraisal district for critical information.
Technology is a critical part of managing large amounts of data effectively and appraisal districts use appraisal systems and mapping or geographic information systems to improve appraisal accuracy and uniformity.
Exhibit 12 presents a list of appraisal and administrative software used in Nolan CAD:
Exhibit 12
Nolan CAD Appraisal and Administrative Software
| Name of Software |
Standalone or Integrated |
When Installed |
Last Upgraded |
Planned Upgrade |
|---|---|---|---|---|
| Capitol Appraisal Group | Standalone | N/A | 2003 | None |
| "MARS" Beyond Appraisal, Inc. | Integrated | Spring 2006 | N/A | None |
| MIMS | Standalone | 1993 | N/A | None |
| Microsoft Office | Integrated | N/A | N/A | None |
Source: Nolan CAD, December 2005.
FINDING
Nolan CAD lacks written standard operating procedures for managing its information processing software and system.
IAAO's Standard on Facilities, Computers, Equipment and Supplies in 6.1 Standards on Practice states "written standards of practice should be prepared" for collection of property data and coding of information for data processing. Standards may incorporate regulations, policy memoranda, procedural manuals, appraisal manuals and schedules.
The appraisal district has contracted with a different appraisal software vendor to provide appraisal software. Nolan CAD has had difficulties with its current mass appraisal software since 2003. Board minutes of the August 15, 2005 meeting reflect a discussion of continuing problems with the then current software conversion from "green" screens to Windows-based software beginning January 2003. The software was not operationally ready for public use, and many programs were incomplete and unusable, which caused the staff to perform extra work and duplicate many procedures. The software did not meet mandated requirements necessary for compliance.
After the onsite visit, the chief appraiser submitted a manual the CAD had begun with operating procedures for the software system adopted in 2003. The windows-based program the CAD chose had no documentation of operating procedures. According to the chief appraiser, the CAD further found that the procedures it was writing became obsolete almost daily so it postponed the documentation project until the software was more developed.
The CAD's appraisal software consumes too many resources such as time and printing paper, and lacks written operating manuals and support help that the CAD personnel can access in order to find out what the problem may be. The CAD is experiencing the same problems it encountered when it first converted 18 months ago. The May 17, 2005 board minutes provide the following assessment of the software conversion of January 2003:
"Computer conversion having problems, still have a lot of clean-up work on files, programs not ready, takes more time to do task, employees getting tired and beginning to feel like the problems will never end. User unfriendly, changes are made to system, district not notified, no explanation given on how to use and very hard to obtain queries."
The query system for the January 2003 conversion software requires that the user be able to program any query. Since the CAD staff lacks special computer programming skills, this is a lengthy or often impossible task. Some queries take overnight to compile and can slow down operations in the office.
One specific problem the CAD experienced was in updating its schedules. Staff stated that after reviewing a ratio study, they attempted to adjust the schedules to reflect market changes. After changing schedules, printed appraisal cards confirmed the changes and calculations were correct. After the CAD mailed appraisal notices, the staff discovered that the software system did not calculate schedule changes correctly. While the error was not significant, staff adjustments did not update the appraisal notices.
The new software lists the following applications and features: residential valuation; commercial valuation; business personal property valuation; billing and collections; interactive GIS; sketch; image and document management; work flow management; data processing and management; analysis and reporting tools; ARB tracking system and prior and future year capabilities. The new software comes with manuals, support help and people the CAD personnel can access to find help with their data processing problems. The appraisal district expects to convert to the new system during the time of this review.
Section 13.3 of the IAAO's Standard on Ratio Studies states that "accuracy and integrity of data entered into or transferred through computer systems must be insured. Design of computer programs have to make it easy to verify data accuracy. Queries must be easy to perform by data entry personnel or other users, so that data can be verified without continual reliance on computer programming staff. Methods to check accuracy of assigned strata (such as school district, city neighborhood, and category) as well as assessed or appraised value, sale price, parcel identifier and other fields must be established and made user friendly."
In Cooke CAD, for example, the appraisal software is updated regularly and employees train on it routinely. The computer coordinator is responsible for the information processing system and for developing written operating procedures that dictate who can access the system. Only the computer coordinator and the chief appraiser can change data.
RECOMMENDATION 7
Develop standard operating procedures for managing the information processing systems.
FINDING
Nolan CAD has not developed a written timeline to integrate its mapping and appraisal software.
The CAD launched its current mapping system in 1993, and today a Nolan CAD employee supports the system. Mapping information is updated for ownership changes and parcel splits.
The appraisal district was converting to a different software vendor at the time of this review for its appraisal records and did not have a precise timeline or plan for when it will integrate its current mapping system with the new appraisal information processing system. The appraisal mapping system is a "stand alone" system, and as such, it is not integrated with the current appraisal data processing software.
After the onsite visit, the chief appraiser proposed a timeline for integrating the GIS system and the new appraisal software by saying, "The target date is January 1, 2010." The CAD did not provide a copy of the timeline. The chief appraiser did not specify any tasks, critical paths, milestones or deadlines and did not define the project. An effective timeline, at a minimum, should:
- define the project;
- list the tasks;
- specify people and equipment for the project;
- identify risks to the project;
- assign people and equipment to tasks;
- define working times for resources;
- organize the tasks into phases;
- schedule tasks;
- set deadlines and constrain tasks;
- track risks and issues associated with the project; and
- check the progress of the project.
The chief appraiser provided no supporting documentation of how the CAD will complete the systems integration project by 2010 and indicated, "It has been difficult to get any estimates as the district cannot give the vendors better information." Due to lack of estimates, the CAD is now considering keeping the mapping company it is currently using.
The appraisal district staff must coordinate with the mapping department to obtain maps when doing fieldwork or market research such as analyzing sales or market areas. The lack of an integrated mapping and appraisal system impedes appraiser productivity, increases workload and increases the possibility of errors by staff having to manually convert data. By integrating mapping and appraisal software, appraisers in the appraisal district would have easy access to mapping information for use in their respective areas.
In the 2004 PVS, the year that is the subject of this review, Blackwell ISD had a weighted mean ratio of .9065 in Category D2, Non-Qualified Land. In the case of Category D1, the majority of open space land in Nolan County is classified as native pasture and was inconsistently appraised in Sweetwater, Blackwell and Highland ISDs in the 2005 PVS. An integrated mapping system can be useful for improving the appraisal performance of these two categories.
In CADs that have integrated the appraisal and GIS systems, the CAD can gather and verify more sales information, which it can leverage to improve valuation work on properties as well as perform ratio studies. The eventual integration of the two systems will allow Nolan CAD to respond quickly to information requests by the public. The integrated system will allow both the appraiser and appraisal review board members access to more comprehensive information on a real-time basis. It will also contribute to more efficient reappraisal work.
In one approach to this issue, for example, Johnson CAD minimizes costs while maintaining an excellent multipurpose graphic system integrated with mapping technology. Johnson CAD is actively involved in multipurpose GIS, working with local governments, the county engineer, the 9-1-1 coordinator and the sheriff's department as local participants to eliminate duplication and minimize costs.
RECOMMENDATION 8
Adopt a written project timeline and plan for integrating the current mapping system with the new appraisal software.
2.5
Optional Recommendations
During the course of the review process, the review team identified certain management and operational issues that may not be directly related to the appraisal process, but can have an indirect impact on the ability of the district to accurately and consistently carry out its mission of property appraisal. The CAD is not obligated to implement these recommendations, but they are provided here for the CAD's consideration as additional ways to enhance its operational effectiveness and efficiency.
FINDING
Nolan CAD has a record retention and filing system but has not filed a records control schedule with the Texas State Library.
The appraisal district has worked with a records retention firm to develop procedures for managing documentation generated in the appraisal office. The CAD has an ample document storage room and keeps records organized in storage boxes. Since the CAD office is in a former bank building, the appraisal district has a vault for safekeeping current appraisal records.
The appraisal district developed a schedule that addresses the required retention period for specific types of documents generated in the appraisal district office such as annual financial statements, budget, working papers, appraiser field notes, ARB minutes and tax receipts. The schedule informs CAD staff where they should file a document and how long the appraisal district must retain documents.
Section 203.041(a) of the Local Government Code requires that each local government must develop a records control schedule and file the schedule with the Texas State Library. According to the Texas State Library, the benefits of records management are:
- complying with legal requirements;
- destroying records that no longer have value to the government;
- providing legal protection to the government when destroying records;
- retaining records of permanent value;
- improving protection of vital records;
- providing security for records with confidential or sensitive information;
- efficiently using office space for active records;
- moving inactive records into less expensive storage areas, if possible;
- releasing equipment and reusable media for other productive uses; and
- maintaining records in formats offering optimal cost-effectiveness
By filing a records retention schedule with the Texas State Library, not only will Nolan CAD comply with Section 203.041(a) of the Local Government Code, but it will also recover resources by minimizing space needed for storage of records and maintaining records in more efficient formats.
RECOMMENDATION 9
File a records retention schedule with the Texas State Library.
FINDING
Nolan CAD has not prepared a comprehensive disaster recovery plan.
According to the chief appraiser, the CAD performs weekly backups of the appraisal district's work data and stores them off-site in a fireproof box. In addition, the appraisal district software vendor stores electronic data. The appraisal district also uses a vault for storing office records.
The minutes to Nolan CAD's board meeting of June 15, 2004 demonstrate the potential for an elevated risk level to the CAD's business continuity:
"Hail Damage to Air Conditioners on roof, adjuster has not reviewed to our knowledge. Called for repairs estimate, significant damage, estimate $3,665.
Received computer hardware for five employees, installed and bill from Capitol Appraisal Group for reimbursement of the Gateway hardware."
By way of peer comparison, the effects of the loss of air conditioning on computer hardware can lead to an elevated risk level as shown in the following minutes of Fort Bend CAD's board meeting of March 17, 2003:
"Chief Appraiser reported they had received three bids on the AC unit for the computer room. Dell sent a second person to reinstall the servers and uninterrupted power supplies. The service technician noted the temperature in the computer room would cause equipment failure. I did let him know a separate unit would be installed shortly. Fans were placed in the room to help with the problem temporarily."
In the absence of a comprehensive disaster recovery plan, a common event such as a hailstorm can interrupt Nolan CAD's business continuity.
In addition to the contingency planning needed above, Nolan CAD's comprehensive disaster recovery plan will, in effect, elevate the level of preparedness for:
- immediate response;
- incident control/evaluation;
- notifications;
- environmental restoration; and
- resumption of critical business function
The critical staff necessary to carry out the recovery should be identified. State and local governments, taxpayers, vendors and the general public should be notified of how and when to contact the appraisal district. In the case of loss of appraisal district facilities, CAD staff need a written plan directing them where and when to report to work.
It is important that the appraisal district have a plan to recover data and continue the CAD's operations with minimum interruption given a worst case scenario. Moreover, it is crucial that the appraisal district be able to recreate its appraisal, mapping, and tax collection systems should the need arise. The inability to perform these tasks prevents the appraisal district from doing the work required by the State of Texas.
The Texas State Library and Archives has an example of a disaster recovery plan available for use by local governments. It can be accessed on their Web site http://www.tsl.state.tx.us/slrm/disaster/recovery_plan.pdf
In the alternative, Exhibit 13 lists some of the key elements of an effective disaster recovery plan.
Exhibit 13
Key Elements of a Disaster Recovery Plan
| Step | Detail |
|---|---|
| Build a disaster recovery team | Identify a disaster recovery team that includes key policy makers, building management, end-users, key outside contractors and technical staff. |
| Obtain and/or approximate key information |
Develop an exhaustive list of critical activities performed within the district. Develop an estimated of the minimum space and equipment necessary for restoring essential operations. Develop a timeframe for starting initial operations after a security incident. Develop a list of key personnel and their responsibilities. |
| Perform and/or delegate key duties |
Develop an inventory of all computer technology assets, including data, software, hardware, documentation and supplies. Set up a reciprocal agreement with comparable organizations to share each other's equipment or lease backup equipment to allow the district to operate critical functions in the event of a disaster. Make plans to procure hardware, software and other equipment as necessary to ensure the CAD can resume critical operations to soon as possible. Establish procedures for obtaining off-site backup records. Locate support resources the CAD needs, such as equipment repair, trucking and cleaning companies. Arrange with vendor to provide priority delivery for emergency orders. Identify data recovery specialists and establish emergency agreements. |
| Specify details within the plan |
Identify individual roles and responsibilities by name and job title so that everyone knows exactly what they should do. Define actions to be taken in advance of an occurrence or undesirable event. Define necessary actions at the onset of an undesirable event to limit damage, loss and compromised data integrity. Identify actions to be taken to re-establish normal operations. |
| Test the plan |
Test the plan frequently and completely. Analyze the results to improve the plan and identify further needs. |
| Deal with damage appropriately |
If a disaster actually occurs, document all costs and videotape the damage. Be prepared to overcome downtime on your own; insurance settlements can take time to resolve. |
| Give consideration to other significant issues |
Don't make a plan unnecessarily complicated. Make one individual responsible for maintaining the plan, but have it structured so that others are authorized and prepared to implement if it is needed. Update the plan regularly and whenever system changes occur. |
Source: National Center for Education Statistics, "Safeguarding Your Technology," November 1998.
RECOMMENDATION 10
Develop, implement and test a written plan for disaster recovery.
FINDING
Nolan CAD has not prepared detailed or comprehensive procedures for day-to-day operations of specific tasks performed by employees such as accounting, payroll, information processing or data entry.
The appraisal district has a document titled "General Policy Procedures for Operations of the Central Appraisal District of Nolan County" as well as internal memos. The document addresses items such as grammar and spelling, letter form, loan codes, public information procedures, as well as tax collection information and procedures.
The appraisal district has a monthly staff meeting in which employees can place items on the agenda for discussion or research and present an item. These meetings allow everyone to report their activities and make plans or coordinate any upcoming projects.
The appraisal district has developed a detailed personnel handbook and a brief listing of job descriptions. These do not, however, detail specific job activities or tasks such as payroll, balancing the cash drawer or entering data into the CAMA system.
A policy explains what a person, department or group of individuals must do, whereas a procedure enumerates how they must accomplish it.
Well-written and organized procedures:
- implement and ensure compliance with policies as well as document the intent of those policies;
- protect the institutional knowledge of an organization, so that as experienced employees leave, new employees have the benefit of the others' years of experience;
- provide the basis for training new employees; and
- offer a tool for evaluating employees based on their adherence to procedures.
To be effective, policy and procedures manuals must be kept current at all times. This means setting up a system for regular updates and distribution, as well as periodic review to ensure that all out-of-date policies are replaced.
El Paso CAD, for example, developed an operations manual for operational procedures and personnel policies that detail the employee roles and responsibilities in the appraisal district. The manual also details the core functions of the appraisal district, such as purchasing, accounts payable, inventory, budget, etc. Included in this manual is a detailed organization chart describing interactions of the board of directors, administration, appraisal district staff, and the CAD comptroller and technology departments. These major divisions each have separate work areas with accompanying specific job descriptions contained in the manual. The Quality Control monitor, at the direction of the chief appraiser, is constantly maintaining and updating the operations manual.
One example of the manual's content pertains to the acceptance or rejection of specialized application forms: deeds, property information, market information, appraisal review board actions, appraisal notices and their specific forms. The manual is accessible internally to all employees on the appraisal district's central server.
RECOMMENDATION 11
Develop policies and procedures and update existing operating manuals.