Legislature(2015 - 2016)HOUSE FINANCE 519

01/21/2015 09:00 AM LEGISLATIVE BUDGET & AUDIT


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09:01:13 AM Start
09:02:08 AM Election of Chairman
09:02:39 AM Election of Vice Chairman
09:03:59 AM Approval of Minutes
09:05:50 AM Outgoing Chairman Status Report
09:10:40 AM Report from Legislative Finance Division
09:13:23 AM Overview of the Legislative Audit Process
09:33:13 AM Consultant Contracts
09:44:48 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Organizational Meeting
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                        January 21, 2015                                                                                        
                           9:01 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Chair                                                                                               
Representative Kurt Olson                                                                                                       
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
Senator Anna MacKinnon, Vice Chair                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Cathy Giessel                                                                                                           
Senator Bert Stedman                                                                                                            
Senator Click Bishop                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mark Neuman (alternate)                                                                                          
                                                                                                                                
Senator Pete Kelly (alternate)                                                                                                  
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Lora Reinbold                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
ELECTION OF CHAIRMAN                                                                                                            
ELECTION OF VICE CHAIRMAN                                                                                                       
APPROVAL OF MINUTES                                                                                                             
OUTGOING CHAIRMAN STATUS REPORT                                                                                                 
REPORT FROM LEGISLATIVE FINANCE DIVISION                                                                                        
OVERVIEW OF THE LEGISLATIVE AUDIT PROCESS                                                                                       
CONSULTANT CONTRACTS                                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAVID TEAL, Legislative Fiscal Analyst                                                                                          
Legislative Finance Division                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information  to the Joint Committee                                                             
on Legislative Budget and Audit.                                                                                                
                                                                                                                                
KRISTIN CURTIS, Legislative Auditor                                                                                             
Division of Legislative Audit                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Provided  information  on the  legislative                                                             
audit process.                                                                                                                  
                                                                                                                                
ROSS ALEXANDER, Performance Review Manager                                                                                      
Division of Legislative Audit                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Provided  information  on the  performance                                                             
review process.                                                                                                                 
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:01:13 AM                                                                                                                    
                                                                                                                                
CHAIR  ANNA MACKINNON  called the  Legislative  Budget and  Audit                                                             
Committee meeting  to order at  9:01 a.m.   Representatives Kito,                                                               
Thompson,  and  Hawker  and Senators  Stedman,  Bishop,  Giessel,                                                               
Hoffman,  and  MacKinnon  were  present at  the  call  to  order.                                                               
Representatives Olson  and Pruitt arrived  as the meeting  was in                                                               
progress.  Also in attendance was Representative Reinbold.                                                                      
                                                                                                                                
^ELECTION OF CHAIRMAN                                                                                                         
                      ELECTION OF CHAIRMAN                                                                                  
                                                                                                                              
9:02:08 AM                                                                                                                    
                                                                                                                                
CHAIR MACKINNON announced that the  first order of business would                                                               
be the election of a new committee chair.                                                                                       
                                                                                                                                
9:02:23 AM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL nominated Representative  Mike Hawker as Chair of                                                               
the Legislative  Budget and Audit  Committee for the  29th Alaska                                                               
State  Legislature and  moved and  asked  unanimous consent  that                                                               
nominations  be closed.   There  being  no objection,  it was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
^ELECTION OF VICE CHAIRMAN                                                                                                    
                   ELECTION OF VICE CHAIRMAN                                                                                
                                                                                                                              
9:02:39 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
the election  of a  new vice  chair.   He nominated  Senator Anna                                                               
MacKinnon  as Vice  Chair  of the  Legislative  Budget and  Audit                                                               
Committee for  the 29th  Alaska State  Legislature and  moved and                                                               
asked  for  unanimous consent  that  the  nominations be  closed.                                                               
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
^APPROVAL OF MINUTES                                                                                                          
                      APPROVAL OF MINUTES                                                                                   
                                                                                                                              
9:03:59 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
the  approval of  the  minutes from  the  Legislative Budget  and                                                               
Audit Committee meeting of December 16, 2014.                                                                                   
                                                                                                                                
9:04:35 AM                                                                                                                    
                                                                                                                                
VICE  CHAIR MACKINNON  directed attention  to the  aforementioned                                                               
minutes and  asked that these  be amended to reflect  the correct                                                               
spelling of  Mr. Janak Mayer.   She made a motion  to approve the                                                               
minutes  of  December 16,  2014,  as  amended.   There  being  no                                                               
objection,  the minutes  from the  meeting of  December 16,  2014                                                               
were approved, as amended.                                                                                                      
                                                                                                                                
^OUTGOING CHAIRMAN STATUS REPORT                                                                                              
                OUTGOING CHAIRMAN STATUS REPORT                                                                             
                                                                                                                              
9:05:50 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
a   status  report   from  the   outgoing  chair   regarding  the                                                               
subcommittee   on   Corporations,   Business   and   Professional                                                               
Licensing.                                                                                                                      
                                                                                                                                
VICE CHAIR MACKINNON  acknowledged the hard work  of Laura Pierre                                                               
and  Erin Shine  on this  subcommittee.   She also  expressed her                                                               
thanks to  Kris Curtis and  David Teal, "who have  been exemplary                                                               
in their  performance for the  State of  Alaska, and truly  a gem                                                               
for all  of us, and a  resource that we should  utilize even more                                                               
than we do now."                                                                                                                
                                                                                                                                
CHAIR HAWKER  expressed that  it had been  his privilege  to work                                                               
with  Senator  MacKinnon,  her   staff,  and  the  aforementioned                                                               
employees.                                                                                                                      
                                                                                                                                
VICE  CHAIR MACKINNON  reported  that the  subcommittee had  held                                                               
nine  meetings  over the  prior  year  for discussion  of  issues                                                               
raised  by   constituents,  professional  licensees,   and  board                                                               
members.   These meetings  focused on a  variety of  topics which                                                               
had included  indirect cost, investigation, board  member travel,                                                               
and  the lack  of financial  information provided  for boards  to                                                               
make decisions.   She shared  that the subcommittee  had directed                                                               
her  staff  to draft  potential  legislative  changes to  address                                                               
these issues.   She listed these changes to  include the cleaning                                                               
up  of  statutes of  an  inactive  board,  review of  options  to                                                               
mitigate  the indirect  cost of  licensees, and  analysis of  the                                                               
travel issues presented  to the board.  She noted  that this work                                                               
was being transitioned to the  office of the incoming Legislative                                                               
Budget and  Audit Committee chair, Representative  Hawker and she                                                               
offered assistance as the process moved forward.                                                                                
                                                                                                                                
CHAIR HAWKER asked whether there  were any questions, noting that                                                               
the committee was considering the  presentation of legislation to                                                               
address some of the subcommittee suggestions.                                                                                   
                                                                                                                                
VICE  CHAIR  MACKINNON  acknowledged the  participation  of  Sara                                                               
Chambers  on this  work, offering  that  Ms. Chambers  [Director,                                                               
Division of  Corporations, Business, and  Professional Licensing,                                                               
Department  of Commerce,  Community &  Economic Development]  was                                                               
available for questions.                                                                                                        
                                                                                                                                
SENATOR GIESSEL  expressed the gratitude of  her constituents for                                                               
this work.                                                                                                                      
                                                                                                                                
CHAIR HAWKER expressed his thanks to Ms. Shine for her work.                                                                    
                                                                                                                                
^REPORT FROM LEGISLATIVE FINANCE DIVISION                                                                                     
            REPORT FROM LEGISLATIVE FINANCE DIVISION                                                                        
                                                                                                                                
9:10:40 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
an  update from  the Legislative  Finance Division  regarding its                                                               
relationship with the Legislative Budget and Audit Committee.                                                                   
                                                                                                                                
9:11:12 AM                                                                                                                    
                                                                                                                                
DAVID  TEAL,  Legislative  Fiscal  Analyst,  Legislative  Finance                                                               
Division, Alaska  State Legislature,  explained that most  of the                                                               
work from his division was  related to the appropriation process,                                                               
specifically toward bill preparation and  the budget process.  He                                                               
explained that RPLs, Revised  Programs Legislative, were requests                                                               
for unanticipated expenses, and  were submitted by departments to                                                               
be reviewed  by the  Legislative Budget  and Audit  Committee for                                                               
authorization.   He noted that  the Legislative  Finance Division                                                               
was  available "to  do anything  that the  committee requests  of                                                               
us."                                                                                                                            
                                                                                                                                
CHAIR  HAWKER clarified  that the  Legislative  Budget and  Audit                                                               
Committee  did  not have  the  statutory  authority to  make  new                                                               
appropriations  and  that  RPLs   were  a  request  intended  for                                                               
additional,  unanticipated funds  in  support  of issues  already                                                               
appropriated.                                                                                                                   
                                                                                                                                
MR. TEAL pointed  out that RPLs were limited to  certain types of                                                               
funds, most often federal receipts.                                                                                             
                                                                                                                                
^OVERVIEW OF THE LEGISLATIVE AUDIT PROCESS                                                                                    
           OVERVIEW OF THE LEGISLATIVE AUDIT PROCESS                                                                        
                                                                                                                                
9:13:23 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
an overview of the legislative audit process.                                                                                   
                                                                                                                                
9:13:35 AM                                                                                                                    
                                                                                                                                
KRISTIN  CURTIS,  Legislative  Auditor, Division  of  Legislative                                                               
Audit,   Alaska  State   Legislature,  reported   that  she   was                                                               
responsible  for  the  Division  of  Legislative  Audit  and  she                                                               
introduced  some of  her key  staff in  attendance, Stacy  Nylen,                                                               
Richard Radford,  and Ross Alexander,  explaining their  roles in                                                               
the division.                                                                                                                   
                                                                                                                                
MS.  CURTIS  presented  the latest  version  of  the  Legislative                                                               
Budget  and  Audit Committee  handbook,  and  summarized that  it                                                               
included the authorizing  statutes for the committee,  as well as                                                               
information and  organization charts for the  two permanent staff                                                               
agencies,   Divisions  of   Legislative  Audit   and  Legislative                                                               
Finance.  The handbook described  the committee's formal policies                                                               
and  procedures,  and she  pointed  out  that the  committee  was                                                               
authorized to  adopt rules  to conduct  its business  and develop                                                               
procedures for its functions.   She directed attention to page 39                                                               
of the  handbook which outlined the  formal procedures, including                                                               
the report  release process for  audits and  performance reviews,                                                               
the consideration  and approval  of audit requests,  the contract                                                               
process,  and   administrative  issues,  including   travel.  She                                                               
emphasized  the  necessity  for  awareness  to  the  confidential                                                               
report distribution  process, noting  that statutes  ensured that                                                               
the audit and  performance review process was  confidential.  She                                                               
stressed the importance  of measures by legislators  and staff to                                                               
prevent any  premature release of  audits and  performance review                                                               
information  until the  committee had  reviewed and  approved its                                                               
release.   She  detailed that  these reports  were released  in a                                                               
multi-phased  process,  with  the first  distribution  considered                                                               
preliminary.  This  first distribution would be  at a Legislative                                                               
Budget and Audit  Committee meeting, and would  only be discussed                                                               
during executive session to protect  its confidentiality.  During                                                               
this time, she would review  the conclusions and recommendations,                                                               
and  field any  questions.   Once the  committee returned  to the                                                               
public meeting, there was an  opportunity to vote for the release                                                               
of this  preliminary report  to the agency  under review  for its                                                               
formal comments.  She emphasized  that, at this point, the report                                                               
still  maintained its  confidential status.   She  explained that                                                               
these  formal comments  were then  combined with  the preliminary                                                               
report, which  was then  returned to  the Legislative  Budget and                                                               
Audit Committee for the authorization  of its final release.  She                                                               
noted that  these final  reports were  provided to  the committee                                                               
members in advance of the  committee meeting, two days in advance                                                               
during legislative session,  and four days in  advance during the                                                               
interim.   She  stated that  the confidentiality  procedures were                                                               
strict, and  that each  committee member  would receive  a sealed                                                               
envelope,  marked confidential,  and  that a  signature would  be                                                               
required  to receive  the report.    She pointed  out that  these                                                               
final reports  were printed  on blue  paper, to  ensure awareness                                                               
that  these  were confidential  documents.    During the  ensuing                                                               
committee meeting,  the process  for consideration of  the report                                                               
would be similar to that of the preliminary report.                                                                             
                                                                                                                                
9:18:28 AM                                                                                                                    
                                                                                                                                
MS. CURTIS, addressing the audit  workload, directed attention to                                                               
a  memo to  Chair Hawker  [Included  in members'  packets].   She                                                               
summarized that there were currently  nine audit requests in this                                                               
workload, which  included four mandatory  sunset audits,  and one                                                               
special audit.   She explained  that the three audits  which were                                                               
currently 65  - 95  percent complete,  the Alaska  Public Offices                                                               
Commission  audit,  the  Alaska  Pioneer  Homes  audit,  and  the                                                               
Statewide Single Audit,  should be completed in  the near future.                                                               
She  reported that  the  audit request  for  the Alaska  Regional                                                               
Development organization,  requested in 2013, had  been withheld,                                                               
as these  agencies had been terminated  at the end of  that year,                                                               
but then  re-authorized, so the  audit would be held  until there                                                               
had been  one year of  completion by  these agencies.   She noted                                                               
that the  audit regarding the  overhaul and refurbishment  of the                                                               
M/V  Tustumena  was currently  on  hold  until completion  of  an                                                               
administrative proceeding.   She concluded with an  update on the                                                               
Matanuska Maid audit and the  dispensation of its assets upon its                                                               
sale, noting that  one building remained for sale.   She reported                                                               
that there  were four sunset  agencies with termination  dates of                                                               
June, 2016, and that these audits would begin shortly.                                                                          
                                                                                                                                
9:20:55 AM                                                                                                                    
                                                                                                                                
MS.  CURTIS   directed  attention   to  a  memo   describing  the                                                               
responsibilities of  the Legislative  Budget and  Audit Committee                                                               
[Included  in  members'  packets].   She  stated  that  the  main                                                               
function  of  the  committee  was to  provide  the  Alaska  State                                                               
Legislature  with fiscal  analysis, budget  analysis, and  audits                                                               
and performance reviews.  She  pointed out that the committee had                                                               
broad  powers  which  included reviews  of  revenue  projections,                                                               
state agency appropriation requests,  expenditure of state funds,                                                               
and the fiscal policies and  procedures of state government.  She                                                               
shared that  the committee could make  recommendations concerning                                                               
appropriations,   expenditures,  and   fiscal  policies   to  the                                                               
governor and the  state legislature.  She listed  the statutes to                                                               
include AS  24.20.201 and  AS 24.20.206.   She stated  that other                                                               
sections  of  statutes  presented the  committee  with  oversight                                                               
responsibilities,  and   often  designated  it  as   the  primary                                                               
representative of  the legislative branch.   She shared  that the                                                               
degree of power  exercised had varied with the  discretion of the                                                               
committee chair.                                                                                                                
                                                                                                                                
CHAIR HAWKER noted that historic  statute, as well as the current                                                               
ongoing statutory  responsibilities, lent  itself to  the various                                                               
responsibilities listed  in the aforementioned memo.   He pointed                                                               
out  that  these  were  guidelines   for  the  direction  of  the                                                               
committee over the next two years.                                                                                              
                                                                                                                                
9:24:13 AM                                                                                                                    
                                                                                                                                
CHAIR  HAWKER  explained  that the  performance  reviews  were  a                                                               
"significant, and  increasing component of the  work performed by                                                               
the Legislative Auditors  staff" and, as they  were expensive, it                                                               
was  incumbent  upon  the  committee  to  continue  to  evaluate,                                                               
review, and determine that the cost benefit was appropriate.                                                                    
                                                                                                                                
9:25:04 AM                                                                                                                    
                                                                                                                                
ROSS   ALEXANDER,  Performance   Review   Manager,  Division   of                                                               
Legislative Audit, Alaska State  Legislature, offered an overview                                                               
of the  process and  the current  status for  these reviews.   In                                                               
2013,  House  Bill   30  was  passed  which   required  that  the                                                               
Legislative Audit  Division complete performance reviews  of each                                                               
state department  at least once  every ten years in  a prescribed                                                               
order.  He explained that  the statutes governing the performance                                                               
review  provided  a list  of  areas  which  the review  team  may                                                               
evaluate,  although each  performance review  had a  unique scope                                                               
which  was  developed  by  the  division  with  input  and  final                                                               
approval  from  the  Legislative   Budget  and  Audit  Committee.                                                               
Following  approval of  the scope,  a competitive  procurement to                                                               
hire  a  contractor  was  conducted   for  each  review.    These                                                               
contractors were  selected based upon experience  with the issues                                                               
conducted  by  the agency  under  review,  as well  as  knowledge                                                               
regarding  the  performance  review   process.    These  reviews,                                                               
although  conducted by  the contractor,  were facilitated  by the                                                               
division with  a systematic  assessment for  the appropriateness,                                                               
effectiveness,  and  efficiency  of the  department,  agency,  or                                                               
program.   They  were  meant to  provide  information to  improve                                                               
performance, while assisting the  Alaska State Legislature in the                                                               
decision making process.  He  reported that the review team would                                                               
seek to  identify a list  of programs supported by  general funds                                                               
that could  be cut  or reduced without  affecting the  ability of                                                               
the  department  to  fulfill  its   mission  or  reduce  required                                                               
services  to the  public.   Once  the  contractors completed  the                                                               
field work,  the finds and  recommendations were compiled  into a                                                               
final  report,  which was  presented  to  the committee  for  its                                                               
ultimate release as a public document.   He shared that the final                                                               
report for  the Department  of Corrections  had been  released by                                                               
the committee at  the December 16, 2014,  meeting. Currently, the                                                               
review  for   Department  of  Health  and   Social  Services  was                                                               
underway, and, given the size  and scope of services, this review                                                               
had been split into four  parts, with contractors hired to review                                                               
Behavioral  Health Services,  Long  Term Care  Services, and  the                                                               
departmental  organization  and  administrative  structure.    He                                                               
shared that  the division would  also analyze  DHSS self-reported                                                               
data.   He estimated the final  reports for DHSS to  be completed                                                               
in the fall  of 2015, with the Department of  Education and Early                                                               
Development scheduled for the next performance review.                                                                          
                                                                                                                                
9:27:58 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER, in response to  Senator Hoffman, pointed to page 19                                                               
of the  aforementioned committee handbook  for a schedule  of the                                                               
remaining departmental reviews.                                                                                                 
                                                                                                                                
9:28:21 AM                                                                                                                    
                                                                                                                                
VICE  CHAIR  MACKINNON  reflected  that,  as  the  Department  of                                                               
Corrections had  "been fairly non-responsive in  actually cutting                                                               
themselves" in response  to its audit, there  had been discussion                                                               
for a  change to the language  in the statute to  allow expansion                                                               
for the reception of vital information to the committee.                                                                        
                                                                                                                                
CHAIR HAWKER  offered his belief  that she had summarized  one of                                                               
the  audit  outcomes,  the challenge  for  outside  examiners  in                                                               
reviewing  and  securing  the cooperation  of  the  agency  under                                                               
review.   He cited AS  44.66.020(C) which stated that  the agency                                                               
would provide the review team a  list of programs, or elements of                                                               
programs,  which comprised  at least  10 percent  of the  general                                                               
funds in the  agency's budget appropriated from  the general fund                                                               
which  could be  reduced or  eliminated.   He  declared that  the                                                               
agencies were  not cooperating, and  he expressed  agreement with                                                               
Senator  MacKinnon  that  this  needed to  be  addressed  by  the                                                               
committee in order to make the process work more effectively.                                                                   
                                                                                                                                
VICE  CHAIR MACKINNON,  in  response, offered  that  it was  "the                                                               
language itself  that actually hampered the  contractor's ability                                                               
to  recommend other  things to  the legislature."   She  declared                                                               
that this was a good  bill, "especially with what Alaska's facing                                                               
right now."                                                                                                                     
                                                                                                                                
CHAIR  HAWKER  suggested  a  review   to  determine  whether  the                                                               
language needed to be amended to accomplish the desired goals.                                                                  
                                                                                                                                
^CONSULTANT CONTRACTS                                                                                                         
                      CONSULTANT CONTRACTS                                                                                  
                                                                                                                                
9:33:13 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the last order of  business would be                                                               
discussion  for  the  ongoing  and  potential  future  consultant                                                               
contracts,  as the  Legislative  Budget and  Audit Committee  was                                                               
generally delegated to procure these  professional resources.  He                                                               
noted that  the only oil  and gas experts currently  engaged were                                                               
Janak Mayer and  Nikolas Tsafos, and he offered  his belief that,                                                               
although they  provided good advice  to the State of  Alaska, the                                                               
committee needed  to have the  resources available, with  "a full                                                               
suite  of  professional  skills,"  to address  new  issues.    He                                                               
suggested  beginning  a dialogue  with  the  committee, and  with                                                               
public consideration,  to assess  what resources  the legislature                                                               
needs to anticipate upcoming gas pipeline development.                                                                          
                                                                                                                                
9:35:29 AM                                                                                                                    
                                                                                                                                
SENATOR  STEDMAN  suggested  that   it  would  be  beneficial  to                                                               
consider the history  of consultants, as, in the  past, there had                                                               
been  "quite a  deep bench  of  consultants to  draw from"  which                                                               
allowed  the  committee  to better  prepare  itself  for  complex                                                               
upcoming issues and  events.  He pointed out that  there had been                                                               
a  drift of  consultants from  the Legislative  Budget and  Audit                                                               
Committee to  the administration, and that,  although "some would                                                               
call it inadvertent, some would  call it imbedded politics," this                                                               
had created  a tighter time frame  for review of the  issues.  He                                                               
suggested that earlier engagement  of consultants would allow the                                                               
committee to be better prepared  for oil and gas subject matters,                                                               
instead of wholly relying on  the administration.  He offered his                                                               
belief  that  "clearly  we  need   a  broader  bench"  of  almost                                                               
overlapping consultants for discussions  of oil and gas economics                                                               
tied to  the tax structure.   He  expressed his concern  that the                                                               
state legislature would not have sufficient consultants.                                                                        
                                                                                                                                
CHAIR  HAWKER  expressed his  interest  in  working with  Senator                                                               
Stedman  to  bring  recommendations  to  the  committee,  and  he                                                               
declared his agreement with the aforementioned concerns.                                                                        
                                                                                                                                
9:39:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KITO suggested the need for contract expertise.                                                                  
                                                                                                                                
CHAIR  HAWKER  clarified  that  he  interpreted  consultation  to                                                               
include legal expertise, and he  expressed agreement that "it's a                                                               
very different thing than economic analysis."                                                                                   
                                                                                                                                
9:39:57 AM                                                                                                                    
                                                                                                                                
CHAIR  HAWKER   directed  attention  to   education  consultants,                                                               
stating that  the passage of House  Bill 278 in 2014  had charged                                                               
the committee  to conduct two procurements  to obtain consultants                                                               
for  education   issues.    He  explained   that  one  consultant                                                               
procurement would  review the current funding  formula in Alaska,                                                               
and  the other  would  review alternatives  to  the approach  for                                                               
funding.   He reported that,  as both of these  procurements were                                                               
underway, there  was limited ability  to further discuss  this as                                                               
there was  a need for confidentiality.   He shared that  he would                                                               
discuss the results as soon as allowed.                                                                                         
                                                                                                                                
9:40:56 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER,  referencing the potential for  Medicaid expansion,                                                               
shared that he  would work with leadership in both  the house and                                                               
the senate  for agreement that  the Legislative Budget  and Audit                                                               
Committee procure  a consultant, available to  leadership and the                                                               
finance committee  chairs, to explain  the many  complexities and                                                               
consequences  for this  proposal.   He  said  that this  decision                                                               
would be open to discussion.                                                                                                    
                                                                                                                                
9:42:37 AM                                                                                                                    
                                                                                                                                
CHAIR   HAWKER,  referencing   the  protocols   for  accountable,                                                               
responsible  contract  management,  explained  that  the  use  of                                                               
consultants  by the  legislature was  done through  the committee                                                               
chair.   He noted that  a memo  reiterating the process  would be                                                               
forthcoming.                                                                                                                    
                                                                                                                                
9:44:22 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER  thanked the committee members  for their dedication                                                               
and commitment  to the  state, as  there were  serious challenges                                                               
before the state  and the committee would have  an important role                                                               
in guidance toward successful solutions.                                                                                        
                                                                                                                                
9:44:48 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
9:44 a.m.                                                                                                                       
                                                                                                                                
                                                                                                                                

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