Pursuant to Wis. Stats., s. 50.04 (5)(fr), I am submitting the Department of Health Services' annual report to the Legislature related to Class A violations committed by nursing homes, and forfeitures assessed on nursing homes for those violations. As defined by Wis. Stats., s. 50.04 (3b), a Class A violation is ". . . a violation of this subchapter or of the rules promulgated thereunder which creates a condition or occurrence relating to the operation and maintenance of a nursing home presenting a substantial probability that death or serious mental or physical harm to a resident will result..."

The Department issued 19 Class A violations in calendar year 2010. The enclosed report provides details on all Class A violations, including the original forfeiture amount assessed and the status of payment.

We have completed the third in a series of analyses of the overtime costs of state agencies, which for the first time also includes the University of Wisconsin System. Our analysis focuses on premium overtime, which is typically earned by employees who staff facilities with 24-hour operations or address emergency needs. Premium overtime is typically paid at 1.5 times the employee's hourly rate for hours in excess of 40 per week.

From 2006 to 2010, state agencies paid a total of $297.5 million in premium overtime. After declining in 2009, premium overtime payments increased 2.5 percent in 2010. The Department of Corrections (DOC) and the Department of Health Services (DHS) continue to account for the largest share of overtime costs. Both agencies' overtime payments increased from 2009 to 2010, although they declined over the five-year period we reviewed.

DOC and DHS have increasingly used surplus positions to control overtime costs and address staffing needs. Surplus positions are intended to be temporary, and statutes authorize their use when "necessary to maintain adequate staffing levels for high turnover classifications, in anticipation of attrition, to fill positions for which recruitment is difficult." However, we are concerned that the increased use of surplus positions for purposes or periods that may not have been intended by the Legislature has had the effect of circumventing statutory controls on position authority, and that existing reporting mechanisms may not provide sufficient information for the exercise of legislative oversight.

We appreciate the courtesy and cooperation extended to us by staff of the Office of State Employment Relations, the Department of Administration, DOC, DHS, University of Wisconsin System Administration, and other agencies reviewed.