Legislature(1997 - 1998)
01/16/1997 08:35 AM House BUD
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* first hearing in first committee of referral
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+ teleconferenced
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Legislative Budget and Audit
January 16, 1997
8:35 a.m.
Senate Finance Committee Room
Juneau, Alaska
Tapes LBA97#2 Side 1 003-246
CALL TO ORDER
Chairman Phillips convened the meeting of the Legislative Budget
and Audit Committee on January 16, 1997 at approximately 8:35
a.m. in Juneau, Alaska.
PRESENT
Representatives Senators
Rep. Martin Chrm. Phillips
Rep. Bunde Sen. Donley
Rep. Croft Sen. Halford
Rep. Hanley Sen. Pearce
Rep. James Sen. Adams
Rep. Therriault
ALSO PRESENT
Mike Greany, Director, Legislative Finance Division; Randy
Welker, Legislative Auditor; Merrill Jenson, Deputy Legislative
Auditor.
OTHER BUSINESS
Mr. Welker introduced himself and brought members' attention to
the Legislative Budget and Audit Committee Handbook that contains
information about the Finance Division, the Audit Division and
copies of the pertinent statutes. Most importantly, on page 27
begins the formal policies and procedures of the Budget and Audit
Committee. Typically in the past, these policies were formally
brought to the Committee and subsequently adopted at the next
meeting. The two most recent changes are first, a policy to
bring any new proposals to the Chairman at least 24 hours ahead
of the meeting and second, a formal method to have audit requests
withdrawn. The remainder of the policies deal with the audit
release procedure. For new members, the last page of the handout
addresses the confidential report distribution procedures that
are in place. All audit reports are confidential until released
to the public. If any member has any questions on the
procedures, Mr. Welker is available to spend time with the member
to clarify the procedures.
Mr. Welker stated that a list of the 1996 audits released is also
included in the packet. The annual report of the Budget and
Audit Committee was previously sent to members' mailboxes. The
annual report contains a two page summary of every audit
released. The next document is a list of all audits issued as
far back as 1990, sorted by department. This will provide a
historical list of the audits conducted. The final document is a
memo that tells the Committee what special audit requests are
currently before it.
Rep. Martin thanked Mr. Welker and his staff for the excellent
job over the years. He also recommended that the audits are
worthless unless the Chairs of the respective Committees review
the annual audits, look at the recommendations, and look at the
requested legislature. In years past, if work on the audits is
not followed-up on with the introduction of the proposed
legislation, the audits are worthless.
Chrm. Phillips stated that with Sen. Pearce's assistance, there
will be an improvement in that department. He also extended an
invitation to the members of the Committee to tour the Division
of Audit, particularly to Rep. Croft.
Mr. Welker introduced the Deputy Legislative Auditor, Merrill
Jenson. In December, Mr. Jenson completed 25 years of service to
the State of Alaska, all of which were with the Audit Division.
Sen. Halford requested a audit of the oil companies' performance
under the two bill that were passed in the last Legislature in
terms of local hire and local construction of modules.
Sen. Donley stated that he would like to explore the way the
Executive Branch responds to Legislative intent language. He has
noticed that in the past almost all Legislative intent is vetoed.
Due to the archaic veto override system, the Legislature only
gets to address the vetoes at least half of the time. He would
like to see a system that forced the Executive Branch to explain
to the Legislature in the consecutive year the reasons for the
prior year's veto.
Rep. Martin felt that it was the burden of the Committee to go to
the Governor for explanation of his intent or policy.
Sen. Phillips requested the at the next meeting Sen. Donley
submit a proposal on how to go about receiving an explanation
from the Executive Branch on intent.
Sen. Donley stated that he did not wish to put the burden on the
LB&A personnel. He wished to see the burden placed on the
Executive Branch. The budget does not have that much Legislative
intent. He felt it would not be that complicated to have the
Executive Branch provide an explanation at the beginning of each
budget section.
Sen. Pearce stated that each Commissioner has been asked to go
through each of last year's Legislative intent and explain which
are or are not being followed. She stated that prior to the
Overview presentations by the Commissioner, the Legislative
analysts and the Legislative auditors will meet to discuss the
departments that will be reviewed. These analysts should be able
to provide some insight into Legislative intent.
Sen. Halford felt that waiting until the next meeting would not
be a good idea. He requested that the Finance pull all the
intents and distribute them to every Committee member. He felt
that the Committee members have begun to accept that Legislative
intents are relatively meaningless.
Mr. Greany stated that records have been kept of the intents
adopted by the Conference Committee whether it was vetoed or not.
The report can be reproduced and made available to the Committee.
He added that the Legislature expresses intent in other ways than
Legislative intent itself. For example, the Legislature may
structure a budget for appropriations and allocations in the
manner that the Legislature wants it. In some cases, when the
Governor brings back a Budget the next year, the budget may be
restructured or put back the way it was before. The Legislature
then has an opportunity to re-adjust the Budget to reflect its
intent.
Mr. Greany stated that the Committee's primary responsibility is
the audit process. However, the Committee also has budget
responsibilities of reviewing interim Budget adjustments as they
relate to Program Receipts and Federal Funds. The Committee gets
the authority to make these changes through the front section of
the Appropriation Bill each year. This section states that any
additional Program Receipts or Federal Funds that come into the
State are appropriated subject to the review process of this
Committee. The Revised Program Legislature (RPL) is the term for
this process. The RPLs are reviewed by the Legislative Finance
office and recommendations are made to the Committee. The other
purpose of the Legislative Finance write-ups is to capsulize what
the issue is about, addressing technical or legal matters that
may arise.
Mr. Greany reminded the Committee that it takes an eight member
quorum and requires agreement from six members of that quorum to
release audits and approve RPLs. Of the six members who agree,
at least one of the members must be from the other Legislative
body. Each House has five regular members and one alternate.
When all the regular members from a House are present, the
alternate may not vote. However, when a regular member is
absent, then the alternate may vote.
Rep. Martin noted that often when the Final Audit comes out,
usually on August 31st, the numbers are usually higher than what
the Committee passed. While the LB&A Committee may feel that it
has cut the budget, however, afterwards it may seem that the
Budget was actually raised again. He hoped that the Committee
does not get used like that.
Chrm. Phillips requested Mr. Greany set up a tour of his division
to allow the members to refresh their memories.
Mr. Greany stated that he felt the Committee is the most
effective oversight tool the Legislative Branch has over the
Executive and Judicial branches.
Chrm. Phillips suggested that the tour be tentatively planned for
a week from this Saturday.
FINAL AUDIT
Sen. Adams MOVED that the special audit request submitted by
himself be APPROVED. No objections being raised, the MOTION was
APPROVED.
ADJOURNMENT
Chrm. Phillips adjourned the meeting at approximately 9:30 a.m.
LBA 1/16/97 Page 1
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