Arizona Board of Appraisal

The Arizona Board of Appraisal was established in 1990 in response to a federal law requiring states to regulate real estate appraisers performing appraisals involving federally related transactions. The Board regulates approximately 1,500 appraisers through its licensure and complaint functions and is funded from fees collected from licensees. The audit found that the Board had developed a backlog of complaints because of a slow complaint resolution process. Delays in resolving complaints occur primarily when complaints require additional investigation, which is performed by volunteers. The audit also found that the Board was not sufficiently separating its investigation and adjudication functions when resolving complaints.

In addition, the Board needs to improve public access to complaint information to better assist consumers in selecting appraisal services. Auditors found that the Board staff did not provide complete and accurate information over the telephone, and poor file management limited the information consumers could obtain in person. The audit also recommended that the Board reduce licensing fees to reduce its large fund balance. The Board’s fund balance was approximately $1.1 million at the end of fiscal year 1997, which was more than three times its $289,000 annual budget. Finally, the audit addressed legislative concerns that the Board did not appropriately resolve complaints. Prior to 1995, the Board’s complaint resolution process was inappropriate and contributed to concerns that the Board afforded at least on of its members preferential treatment. These concerns were investigated as part of a 1996 review by the federal Appraisal Subcommittee, and resulted in an admonishment to exercise caution in the future to avoid even the appearance of preferential treatment. The Board changed its complaint resolution process in 1995, and neither this audit nor the Appraisal Subcommittee review noted instances of apparent preferential treatment since then.