Legislature(2015 - 2016)Anch LIO Auditorium

05/07/2015 10:00 AM LEGISLATIVE BUDGET & AUDIT

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Audio Topic
10:03:23 AM Start
10:04:56 AM Approval of Minutes
10:06:05 AM Special Audit Requests
10:22:34 AM Executive Session
11:34:27 AM Other Committee Business
11:34:40 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Rescheduled from 5/8/15 --
+ - Special Audit Requests TELECONFERENCED
-- Testimony <Invitation Only> --
- EXECUTIVE SESSION: Preliminary Audits & Follow
Up Review
- Other Committee Business
- Subcommittee EXECUTIVE SESSION: Dept. of
Education & Early Development Performance Review
Scope (will convene immediately following
adjournment of the regular meeting)
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                       Anchorage, Alaska                                                                                        
                          May 7, 2015                                                                                           
                           10:03 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Chair                                                                                               
Representative Kurt Olson                                                                                                       
Representative Lance Pruitt                                                                                                     
Representative Sam Kito                                                                                                         
                                                                                                                                
Senator Anna MacKinnon, Vice Chair                                                                                              
Senator Cathy Giessel                                                                                                           
Senator Bert Stedman                                                                                                            
Senator Click Bishop                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Steve Thompson                                                                                                   
Representative Mark Neuman (alternate)                                                                                          
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
Senator Pete Kelly (alternate)                                                                                                  
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Lynn Gattis                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF MINUTES                                                                                                             
SPECIAL AUDIT REQUESTS                                                                                                          
EXECUTIVE SESSION                                                                                                               
OTHER COMMITTEE BUSINESS                                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KRISTIN CURTIS                                                                                                                  
Legislative Auditor                                                                                                             
Division of Legislative Audit                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the special audit                                                             
requests.                                                                                                                       
                                                                                                                                
SENATOR BERTA GARDNER                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Presented a  request for  an audit  of the                                                             
Alaska  Scientific Crime  Detection Lab  under the  Department of                                                               
Public Safety.                                                                                                                  
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:03:23 AM                                                                                                                   
                                                                                                                                
CHAIR  MIKE  HAWKER  called  the  Legislative  Budget  and  Audit                                                             
Committee  meeting  to  order  at  10:03  a.m.    Representatives                                                               
Hawker, Pruitt, Olson, and Kito  and Senators MacKinnon, Giessel,                                                               
and Bishop  were present at the  call to order.   Senator Stedman                                                               
arrived as the meeting was in  progress.  Also in attendance were                                                               
Representatives Gattis and Wilson.                                                                                              
                                                                                                                                
^Approval of Minutes                                                                                                          
                      Approval of Minutes                                                                                   
                                                                                                                                
10:04:56 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced that the  first order of business would be                                                               
the approval of the minutes.                                                                                                    
                                                                                                                                
10:05:36 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON made  a motion to approve the  minutes of March                                                               
30,  2015.   There  being  no  objection,  the minutes  from  the                                                               
meeting of March 30, 2015 were approved.                                                                                        
                                                                                                                                
^Special Audit Requests                                                                                                       
                     Special Audit Requests                                                                                 
                                                                                                                                
10:06:05 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
to review three special audit requests.                                                                                         
                                                                                                                                
10:06:46 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON  directed attention to  a memo dated  March 27,                                                               
2015,  in which  she  outlined  a request  for  an  audit of  the                                                               
Commercial  Passenger Vessel  (CPV) tax  under the  Department of                                                               
Revenue.  [Included  in members'  packets].    She reported  that                                                               
there was  concern that this CPV  tax was not being  used for its                                                               
declared purpose.   She said that there had  been assertions that                                                               
some Southeast communities were  stockpiling these CPV funds, and                                                               
that  some  of  the  money was  being  spent  inappropriately  on                                                               
projects that were inconsistent with  the federal mandate for use                                                               
of  these funds.    She suggested  that  the Legislative  Auditor                                                               
review whether  the use  of these dollars  was in  an appropriate                                                               
manner.                                                                                                                         
                                                                                                                                
10:08:12 AM                                                                                                                   
                                                                                                                                
CHAIR  HAWKER  asked  Ms.  Curtis  if she  had  worked  with  the                                                               
requestor of  this audit,  and whether  she was  comfortable with                                                               
the scope of the audit as it was defined in this document.                                                                      
                                                                                                                                
KRISTIN  CURTIS,  Legislative  Auditor, Division  of  Legislative                                                               
Audit, Alaska State Legislature, replied "yes."                                                                                 
                                                                                                                                
10:08:30 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON explained  that the head [CPV]  tax directed $8                                                               
to the  Port of Juneau,  $7 to the Port  of Ketchikan, and  $5 to                                                               
each of  five additional  communities.  She  relayed that  it had                                                               
been  suggested that  some of  the communities  were holding  the                                                               
funds for  investment in  large, future  projects or  had pledged                                                               
the funding  for bonds.   She stated  that there were  many other                                                               
ports of  call for cruise  ships throughout Alaska that  had less                                                               
than desirable  cruise ship passenger  facilities.   She declared                                                               
that these  dollars were specific  and should be  used, possibly,                                                               
in a broader manner than currently proposed in Alaska statute.                                                                  
                                                                                                                                
SENATOR MACKINNON  moved to approve  her request for an  audit of                                                               
the  Commercial  Passenger Vessel  Tax  under  the Department  of                                                               
Revenue.  There being no objection, it was so ordered.                                                                          
                                                                                                                                
10:09:57 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
an  audit request  by  Senator  Giessel for  the  Board of  Game,                                                               
Alaska Department of Fish &  Game, and local advisory committees.                                                               
He shared  his support for the  request as he opined  that it had                                                               
been brought to both of their attentions by a constituent.                                                                      
                                                                                                                                
10:10:08 AM                                                                                                                   
                                                                                                                                
SENATOR GIESSEL  directed attention  to a  memo to  the committee                                                               
dated April  27, 2015,  in which  she outlined  a request  for an                                                               
audit  of the  Board of  Game and  the Local  Advisory Committees                                                               
under the Alaska Department of  Fish & Game [Included in members'                                                               
packets].   She explained the  process, noting that the  Board of                                                               
Game regulated  hunting and the  use of game resources,  and that                                                               
local  advisory  committees  also  had some  purview  over  these                                                               
regulations, the  timing of the  hunts, and the permitting.   She                                                               
shared that her  office had received concerns  for the regulatory                                                               
outcomes  and the  decision  making process.    She requested  an                                                               
audit of  the decision making process  by the Board of  Game from                                                               
2010 to the  present.  She listed the  specific audit objectives,                                                               
which  included:   are the  Board of  Game (BOG)  decisions being                                                               
made in  compliance with  state law  and legislative  intent; are                                                               
the   advisory  committee   recommendations   rooted  in   Alaska                                                               
Department  of  Fish  &  Game (ADFG)  research,  as  this  should                                                               
include recommendations  concerning intensive  management actions                                                               
as supported by ADFG scientific  data.  If recommendations do not                                                               
align  with the  scientific data,  what  is the  reason for  this                                                               
regulatory  misalignment?    She   asked  if  the  BOG,  advisory                                                               
committees, and  ADFG consistently follow  established procedures                                                               
and do the  participants have a clear  and accurate understanding                                                               
of their respective roles.   She questioned whether there was any                                                               
pre-vetting of  proposals, and was this  effective and efficient.                                                               
She  queried if  these BOG  decisions  were being  upheld by  the                                                               
courts.     She   asked   if  the   ADFG   data,  research,   and                                                               
recommendations for  intensive management  were available  to the                                                               
advisory committees before  their recommendations were necessary.                                                               
She requested to know how the entities were working together.                                                                   
                                                                                                                                
10:12:30 AM                                                                                                                   
                                                                                                                                
MS.  CURTIS, in  response  to  Chair Hawker,  said  that she  had                                                               
worked with  the audit  requestor when  drafting the  request and                                                               
she was comfortable with the objectives of the audit.                                                                           
                                                                                                                                
10:12:57 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON moved to approve  Senator Giessel's request for                                                               
an  audit of  the Board  of  Game and  Local Advisory  Committees                                                               
under  the Alaska  Department of  Fish &  Game.   There being  no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
10:13:25 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
an audit request by Senator Gardner.                                                                                            
                                                                                                                                
SENATOR  BERTA   GARDNER,  Alaska  State   Legislature,  directed                                                               
attention to a  letter to the committee dated March  26, 2015, in                                                               
which  she  outlined  a  request  for  an  audit  of  the  Alaska                                                               
Scientific  Crime  Detection   Laboratory  (ASCDL)  [Included  in                                                               
members' packets].   She referenced  recent national  reports for                                                               
backlogs of rape kits which had  not been tested.  She noted that                                                               
there had been  a sustained effort to catch up  with this backlog                                                               
in some areas,  which had led to identification  of rape suspects                                                               
who had committed  other rapes.  She pointed out  that, as Alaska                                                               
had  "appalling statistics  about rape  and sexual  assault," she                                                               
had questioned whether  the state also had a backlog  of rape kit                                                               
tests.  She  reported that a legislative research  request with a                                                               
series of questions had been  submitted, which included a request                                                               
for  the number  of rape  kits typically  untested each  year, an                                                               
estimate  for the  percentage  of rape  kits  tested, were  there                                                               
statutory,  regulatory,  or  police  time  frames  for  mandating                                                               
testing  schedules, and  were there  examples of  rape kits  that                                                               
were  not  tested   which  had  resulted  in   more  hardship  or                                                               
additional  rapes.   She reported  that these  responses had  all                                                               
been  "unknown,  unknown,  unknown,"  which she  declared  was  a                                                               
shock.   She  noted that  she had  then introduced  SB 54,  which                                                               
required the Department  of Public Safety to conduct  an audit on                                                               
all  of the  untested sexual  assault rape  kits that  may be  in                                                               
their position, as  well as the kits in possession  of the ASCDL.                                                               
She said that,  shortly after introduction of SB 54,  there was a                                                               
newspaper  story about  the proposed  bill, and  her office  then                                                               
began to  receive calls  from employees  and former  employees of                                                               
the  ASCDL.   She  relayed that  there were  claims  of fear  for                                                               
losing national  accreditation because  of management  failure to                                                               
maintain a proper  chain of custody with evidence  and failure to                                                               
adhere to  standards for  storage of evidence.   She  shared that                                                               
other long term employee technicians  reportedly left for similar                                                               
reasons.   She relayed that  a high level supervisor  employed by                                                               
DPS had worked for various iterations  of the ASCDL, but had been                                                               
forced  out  for  continual  complaints  to  management  for  the                                                               
unkempt nature  of the crime  lab operation.  Another  person had                                                               
stated  they  were offended  by  the  mismanagement of  the  lab,                                                               
stating that  this was  "the biggest  miscarriage of  justice the                                                               
state had ever seen."                                                                                                           
                                                                                                                                
CHAIR  HAWKER  clarified that  these  were  allegations, and  not                                                               
statements of fact.                                                                                                             
                                                                                                                                
SENATOR  GARDNER   expressed  her  agreement,  but   noted  that,                                                               
cumulatively, these  raised questions.  She  reported that during                                                               
that time there  had also been an ASCDL employee  found guilty of                                                               
felony theft  of drugs  and evidence  tampering over  four years.                                                               
She acknowledged  that the statements  were hearsay, but  she did                                                               
not want to disregard all of  them.  She also expressed questions                                                               
for the  annual budget to the  ASCDL, and whether or  not the new                                                               
lab allowed  for more in-house  testing and better results.   She                                                               
had  heard  that there  were  now  actually fewer  resources  for                                                               
evidence testing,  with a lot  of the  testing being sent  out of                                                               
state.                                                                                                                          
                                                                                                                                
CHAIR HAWKER pointed out that  the specific audit objectives were                                                               
listed on the aforementioned letter.                                                                                            
                                                                                                                                
10:18:21 AM                                                                                                                   
                                                                                                                                
MS.  CURTIS, in  response  to  Chair Hawker,  said  that she  had                                                               
worked with  the audit requestor  when drafting the  request, her                                                               
staff had  visited the  ASCDL and  done some  informal inquiries,                                                               
and she was comfortable with the objectives of the audit.                                                                       
                                                                                                                                
10:19:06 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON moved to approve  Senator Gardner's request for                                                               
an audit of  the Alaska Scientific Crime Detection  Lab under the                                                               
Department of  Public Safety.   There being no objection,  it was                                                               
so ordered.                                                                                                                     
                                                                                                                                
10:19:35 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER  asked for an  update on  the current status  of the                                                               
audits and  the time frame  for a  response to these  three audit                                                               
requests.                                                                                                                       
                                                                                                                                
MS. CURTIS  reported that  there were  currently three  audits in                                                               
the queue, which  she surmised had not yet started.   She relayed                                                               
that about  seven had  already begun and  would be  released this                                                               
year.   She noted that the  [M/V] Tustumena audit was  being held                                                               
pending  the litigation,  and the  audit of  the Alaska  Regional                                                               
Development  Organizations (ARDORS)  had  been held  as they  had                                                               
been  de-funded, and  then re-funded  in Fiscal  Year 2015.   She                                                               
reported  that her  division would  hold this  for one  year, and                                                               
would  then begin  in  the fall  if  it was  funded  again.   She                                                               
mentioned  that the  audit of  the University  of Alaska  and the                                                               
State of Alaska  travel offices had just started.   She expressed                                                               
anticipation that one  of these audits should be  started by mid-                                                               
summer.                                                                                                                         
                                                                                                                                
MS. CURTIS,  in response,  said that  completion depended  on the                                                               
nature of the topic, offering her  belief that the ASCDL could be                                                               
time consuming as the questions  were fairly complex.  She opined                                                               
that the CPV [tax] audit should  be quick, as there was already a                                                               
reporting process  for gathering  the information which  could be                                                               
built upon.   She suggested  that the  Board of Game  audit could                                                               
take at least one year.                                                                                                         
                                                                                                                                
^Executive Session                                                                                                            
                       Executive Session                                                                                    
                                                                                                                                
10:22:34 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
to move into Executive Session.                                                                                                 
                                                                                                                                
SENATOR  MACKINNON made  a motion  to move  to executive  session                                                               
under Uniform Rule 22 for  the purpose of discussing confidential                                                               
audit reports and  tariff system data under AS  24.20.301.  There                                                               
being no objection, the committee  went into executive session at                                                               
10:23 a.m.                                                                                                                      
                                                                                                                                
10:23:06 AM                                                                                                                   
                                                                                                                                
MS. CURTIS  asked if  the audit  staff could  stay on  during the                                                               
executive session.                                                                                                              
                                                                                                                                
CHAIR HAWKER expressed his agreement.                                                                                           
                                                                                                                                
10:23:44 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:23 a.m. to 11:31 a.m.                                                                     
                                                                                                                                
11:31:28 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER  brought the committee  back to order at  11:31 a.m.                                                               
Representatives  Kito, Pruitt,  Olson,  and  Hawker and  Senators                                                               
MacKinnon and Giessel were present at the call to order.                                                                        
                                                                                                                                
11:32:23 AM                                                                                                                   
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
11:34:07 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON  made a motion  for the preliminary  audits for                                                               
the Alaska  Public Offices Commission  and the  Alaska Commission                                                               
on  Aging  to  be  released   to  the  appropriate  agencies  for                                                               
response.  There being no objection, it was so ordered.                                                                         
                                                                                                                                
SENATOR MACKINNON  made a motion  for the RCA Tariff  System Data                                                               
memo to be released to the  public.  There being no objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
^Other Committee Business                                                                                                     
                    Other Committee Business                                                                                
                                                                                                                                
11:34:27 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER asked if there was any other committee business.                                                                   
                                                                                                                                
11:34:40 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
11:34 a.m.                                                                                                                      

Document Name Date/Time Subjects
LBA_Meeting Packet_7May15.pdf JBUD 5/7/2015 10:00:00 AM