Legislature(2001 - 2002)
05/07/2001 09:10 AM House BUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT COMMITTEE ON LEGISLATIVE BUDGET AND AUDIT
May 7, 2001
9:10 a.m.
MEMBERS PRESENT
Senator Gene Therriault, Chair
Senator Randy Phillips
Senator Lyman Hoffman
Senator Gary Wilken, alternate
Representative Hugh Fate, Vice Chair
Representative John Harris
Representative Ken Lancaster
HOUSE MEMBERS ABSENT
Senator Jerry Ward
Senator Dave Donley
Representative Eldon Mulder
Representative Reggie Joule
Representative William Williams, alternate
Representative John Davies, alternate
COMMITTEE CALENDAR
APPROVAL OF MINUTES
AUDIT REPORTS
OTHER COMMITTEE BUSINESS
WITNESS REGISTER
PAT DAVIDSON, Legislative Auditor
Division of Legislative Audit
333 Willoughby Avenue
PO Box 113300
Juneau, Alaska 99811-3300
POSITION STATEMENT: Spoke on behalf of the Division of
Legislative Audit.
DAVID TEAL, Legislative Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
PO Box 113200
Juneau, Alaska 99811
POSITION STATEMENT: Spoke on behalf of the Legislative Finance
Division.
ACTION NARRATIVE
TAPE 01-05, SIDE A
Number 0001
CHAIR THERRIAULT called the Joint Committee on Legislative
Budget and Audit meeting to order at 9:10 a.m. Present at the
call to order were Senators Phillips, Wilken, and Therriault,
and Representatives Harris, Lancaster, and Fate. Senator
Hoffman arrived after the call to order.
APPROVAL OF MINUTES
CHAIR THERRIAULT indicated the first order of business would be
the approval of minutes from the Legislative Budget and Audit
meeting held on March 29, 2001.
Number 0119
VICE CHAIR FATE made a motion to approve the minutes from the
March 29, 2001, meeting. There being no objection, the minutes
were approved.
AUDIT REPORTS
CHAIR THERRIAULT stated that the primary reason for this meeting
was to consider four audit requests before the interim. The
first audit request was from Senator Drue Pearce, dated April 5.
He asked Pat Davidson [Division of Legislative Audit] if she
knows exactly what Senator Pearce is looking for.
PAT DAVIDSON, Legislative Auditor, Division of Legislative
Audit, replied that "we" have worked with Senator Pearce on this
audit request, and therefore have an understanding of the
intent. She remarked that Senator Cowdery has voiced some
questions and concerns with regard to the contract. However,
she believes that they will be addressed in this audit request.
CHAIR THERRIAULT asked if this separate audit request would be
covered.
PAT DAVIDSON remarked that Senator Cowdery had concerns that
went beyond this audit request.
Number 0183
VICE CHAIR FATE made a motion to approve the first audit
request, for the Department of Transportation and Public
Facilities - Ted Stevens Airport Terminal Redevelopment Project,
Selected Issues. There being no objection, the audit request
was approved.
CHAIR THERRIAULT announced that the second audit request would
be Senator Cowdery's request regarding the airport. He asked
Ms. Davidson what Senator Cowdery is specifically looking for.
MS. DAVIDSON stated that Senator Cowdery's interest lies in the
impact of the design specifications' failing to meet the seismic
standards, including what happens in relation to costs, lost
revenues, impacts of the timeline, and the funding source to
compensate for that failed design.
VICE CHAIR FATE made a motion to approve the second audit
request, regarding the Department of Transportation and Public
Facilities - Ted Stevens Airport Terminal Redevelopment Project
Design Specifications and Specific Issues. There being no
objection, the audit request was approved.
CHAIR THERRIAULT announced that the third audit request,
relating to the governor's use of an aircraft and its expenses,
was from Senator Pearce and Senator Taylor. He noted that
Senator Taylor has brought this issue forward a number of times.
VICE CHAIR FATE made a motion to approve the third audit
request, regarding the Department of Public Safety - King Air
Aircraft usage FYs 00 and 01. There being no objection, the
audit request was approved.
Number 0458
CHAIR THERRIAULT announced that the fourth audit request was
submitted by Senator Green regarding the Department of Fish and
Game, Division of Wildlife Conservation Public Information and
Training Education Program. He noted that he has not spoken to
Senator Green about this, and wondered how long Ms. Davidson had
been working on it with her.
MS. DAVIDSON replied that this was discussed with Senator
Green's staff on Friday.
CHAIR THERRIAULT asked if she wants just an accounting on the
program or is looking for something in particular.
MS. DAVIDSON answered that she believes "they" are looking at
whether the program run by the Department of Fish and Game is in
total compliance with its federal funding source, the Pittman-
Robertson funds.
Number 0522
SENATOR PHILLIPS asked when the last audit was done on them.
MS. DAVIDSON replied that it has been a number of years since an
audit was done on hunter safety. She noted that generally
compliance with federal programs is looked at on an annual
basis. However, [audits] are often set up on a rotating basis.
Number 0559
REPRESENTATIVE FATE made a motion to approve the fourth audit
request, regarding the Department of Fish and Game, Division of
Wildlife Conservation Public Information and Training Education
Program. There being no objection, the audit request was
approved.
CHAIR THERRIAULT asked Ms. Davidson when preliminaries would be
done on these audit requests.
MS. DAVIDSON replied that with audits from this meeting and the
last one, she expects that [the division] will be busy for the
next six months. However, she expects that these audits will be
completed by the end of the interim.
OTHER COMMITTEE BUSINESS
Number 0616
CHAIR THERRIAULT stated that Ms. Davidson has requested approval
for an expenditure for modular workstations in the Division of
Legislative Audit. They have (indisc.) equipment, desks and
partitioned walls over the past years to refurnish their
workspace. He went on to say that they have been frugal with
the money that was budgeted for them this year. The division
would like to use some of the surplus money to purchase new
modular workstations for the auditors. He noted that there was
a memorandum from Ms. Davidson in committee packets.
MS. DAVIDSON reiterated that the Division of Legislative Audit
is frugal and watches "general services and supply" fairly
closely. For example, [the division] almost received furniture
from the Division of Retirement and Benefits, which was redoing
its space; however, due to space constraints in the division's
office, eight-by-eight standard cubicles are not possible.
Therefore, substandard-sized cubicles are necessary in order to
be within space constraints.
VICE CHAIR FATE made a motion to approve the procurement request
for up to $75,000. There being no objection, the request was
approved.
Number 0737
CHAIR THERRIAULT stated that the final business was the [Alaska
School Operating Cost Study] report regarding minimum
expenditure for instruction, which was dictated when SB 36 was
passed. Statutes say that after the report is done, it needs to
be submitted to the Joint Committee on Legislative Budget and
Audit for review. He noted that members of the legislature
would be made aware that it is available for review.
Number 0778
SENATOR WILKEN explained that this report is the result of
education reform done three years ago. One of the good things
that resulted from SB 36 was finding out that four school
districts were spending 50 percent more [of their operating
budget] outside of the classroom than inside the classroom.
Therefore, a goal of 70 percent was set, which was adjusted last
year as the department attempted to redefine [the percentage]
with and without the classroom. A compromise of 65 percent [of
the operating budget that should be spent on instruction]
resulted. Those districts that don't meet the goals must come
before the board and explain why they didn't. He pointed out
that the effort is not to be punitive, but to be corrective in
an attempt to place money in the classroom and not in
administration.
SENATOR WILKEN directed attention to page 9 of the report. He
noted that two school districts, the Annette Island and Chatham
School Districts, had failed to meet the minimum requirement and
to explain why that 65 percent minimum requirement couldn't be
met. The top of page 10 specifies the penalty that is set forth
in statute. Those districts had to appeal to the Alaska State
Board of Education & Early Development, which granted those
districts a waiver. Senator Wilken provided the committee a
letter from Susan Stitham, Chair, Alaska State Board of
Education & Early Development, which responds to Senator
Wilken's charge that the board's action was outside the
statutes; he said Ms. Stitham was outside the law because the
law simply doesn't allow the argument used to not implement
corrective action for these two school districts. Senator
Wilken reiterated that this is not meant to be punitive but
rather corrective.
CHAIR THERRIAULT remarked that it will take some time to sit
down and read the report. He requested that the members take
the time to do so because education funding is the largest part
of the state operating budget.
Number 1035
SENATOR WILKEN turned to the capital budget and pointed out that
there is a $350,000 for the Alaska School Operating Cost Study.
Senator Wilken expressed his distress with the House's moving
[the deadline for the study] to March 2002. He felt that was a
terrible decision that was driven by politics rather than
rational thought. He said, "That effort is going to be
monumental, at best. It's never been done before. And it
affects every kid in our school [districts]; it affects every
parent of every kid." Therefore, the last thing that anyone
wants is to have a weak study that becomes a "political
football" during campaign time. He pointed out that this study
has to produce a product much like the exit exam, and that is it
has to be valid and reliable for what it measures. Absent a
credible study, people will continue to fall back on the
district cost factors as a reason why money isn't put into
education. Senator Wilken said, "You have to continue to beat
down these doors of excuses why people don't want to support K-
12 education; this is one of them." If this study is done
correctly, he said, that argument will be laid to rest.
However, Senator Wilken maintained that March 2002 is too soon.
He said it rests with Chair Therriault to see that it is done
correctly; however, he offered his help.
CHAIR THERRIAULT noted his understanding of Senator Wilken's
concern.
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, said he agreed with Senator
Wilken's opinion. Mr. Teal informed the committee that he had
worked with the McDowell Group during the writing of the
previous study, which was incorporated into SB 36; therefore, he
is familiar with the cost factors. He indicated that an early
date for the study will provide an excuse for why it wasn't done
correctly, and said the study will not be done correctly with a
March 2002 deadline.
MR. TEAL said perhaps the study could be done correctly if the
request for proposals (RFP) "went out the door," if there were
no concerns or protests, and if the bid was awarded quickly.
Therefore, it is possible to complete the study by March [2002].
However, he didn't foresee the procurement process getting money
on the street that quickly. Furthermore, it is going to be
difficult to set up because school isn't in session during the
summer. It will be difficult to really get started on this
study until September or October, and then the information from
communities across Alaska must be gathered, which takes time.
With the March [2002] deadline, the desired study will not be
produced.
SENATOR WILKEN recalled that the study for SB 36 found,
surprisingly, that 53 schools didn't have a common chart of
accounts. Therefore, the department has been working on having
a common chart of accounts throughout the school districts. He
asked to how that process is progressing.
MR. TEAL answered, "Firsthand, I don't know," but said staff
hired [for that purpose] have been working on it long enough
that the system should be vastly improved. However, he pointed
out that this study says not to look at the chart of accounts
but rather to look at [cost factors in the community]. He said,
"That's the directive you've got here. It's not a school cost
factor anymore; it's a cost-of-living study."
SENATOR WILKEN interjected that it is the cost of education,
which is different from the cost of living. "This is the issue
we have in front of us," he added.
CHAIR THERRIAULT asked where the capital budget is on the House
side; after determining that the capital budget was [in third
reading on the House floor], he indicated this could still be
fixed.
REPRESENTATIVE LANCASTER said there had been discussions on that
in the House Finance Committee, which is where the date was
changed per the request of Eddy Jeans, Department of Education &
Early Development.
REPRESENTATIVE HARRIS clarified that he believes Mr. Jeans
agreed with Senator Wilken's position. However, he believes
that at the time there may have been some negotiations that
changed Mr. Jeans' opinion. Still, Representative Harris said
he felt it could be revisited.
Number 1431
CHAIR THERRIAULT emphasized the need to be concerned with this
because this is going to rely on his staff. He indicated he
would speak with Speaker Porter on this matter so that time and
money were not wasted [with a poor study] that allows the
aforementioned argument.
SENATOR WILKEN informed the committee that Mr. Jeans had
testified in both the House and Senate Health, Education &
Social Service Committees and Finance Committees, prior to the
other night, that 2003 is the appropriate date. Senator Wilken
said:
If this creates a great big rift, then ... the burden
will be ... on us to have the strength next year in
March to say to the people who are winning ..., in the
numbers, that we're not going to have a report because
it's not valid - because the people that are losing
are going to be exactly where we were three years ago,
with exactly the same arguments and exactly the same
issue. ... It affects everybody, and that cost
differential ... is very significant in the overall
funding. ... If ... [the House] doesn't want to set
things aside and go through this, ... that's fine, but
we need to know, then, that that rests on our
shoulders to make sure that ... we have the strength
next year to say, "No, we don't have it to the point
where to let it out to the public."
Number 1552
SENATOR PHILLIPS asked whether Mr. Teal is suggesting a January
2003 or a July 2003 deadline. As a former chair of the Joint
Committee on Legislative Budget & Audit, Senator Phillips said,
"You're not going to be able to make it."
MR. TEAL remarked that he didn't believe [January or July] would
matter that much. He suggested that if the study came out in
September, for example, the legislature would be able to review
it, versus if it came out in January. Although there is no
reason to delay it for an entire year, he did believe that
another six months would be beneficial. Last time, there wasn't
time to "do the study right," although "we" did the best we
could with the time allotted. Mr. Teal said he believes the
legislature wants the best study possible, not just the study
possible within the timeframe.
CHAIR THERRIAULT referred to Representative Wilson's bill, HB
203. He pointed out that quite often the budget bills are held
past the end of the session before being transmitted to the
governor for his action. Therefore, "it puts us out quite a
ways before we get it." He related his understanding that the
[committee] cannot begin the RFP process until the appropriation
is obtained.
MR. TEAL said he isn't sure whether it is law or policy, but it
is firmly enforced that the RFP process isn't started until the
money is in hand.
CHAIR THERRIAULT pointed out that there are also time
requirements for the requests. At the earliest, he projected
that the process couldn't begin for three or four months.
MR. TEAL remarked that [it could be anyone's guess] as to
whether there are challenges and protests. However, even
without challenges and protests and the money being available
quickly, the necessary information from the school districts
won't be obtained until they return to work in December.
Number 1684
SENATOR PHILLIPS interjected that there is no question that
there will be challenges.
MR. TEAL commented that it is too much money to not have a
challenge.
SENATOR PHILLIPS said he believes Senator Wilken's judgment call
is correct.
SENATOR WILKEN expressed the need to view this study as a ten-
year project rather than a mere $350,000 contract.
Number 1737
MS. DAVIDSON, in response to Senator Phillips, said she
anticipates some preliminary reports at the end of June, with
the next set arriving in mid-September.
CHAIR THERRIAULT said that he didn't plan to have monthly
meetings, which don't seem necessary. However, he didn't want
audits to sit. He announced that he would work with the
members' schedules. The meetings will likely occur in
Anchorage, he noted, although there may be meetings held in
Fairbanks when it is cost-effective to do so.
ADJOURNMENT
There being no further business before the committee, the Joint
Committee on Legislative Budget and Audit meeting was adjourned
at 9:40 a.m.
| Document Name | Date/Time | Subjects |
|---|