Legislature(2015 - 2016)ANCH LIO CONF RM

10/17/2016 10:00 AM LEGISLATIVE BUDGET & AUDIT

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Audio Topic
10:11:10 AM Start
10:13:35 AM Approval of Minutes
10:17:48 AM Executive Session
03:22:25 PM Aslc/acpe Performance Review
03:22:53 PM Deed Performance Review
03:23:31 PM Audit Preliminary Reports
03:24:00 PM Audit Final Reports
03:25:28 PM Legislative Revised Programs (rpls)
03:38:56 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Location: Anchorage LIO Large Conference Room
1500 W. Benson Blvd., Ste 226, Anchorage
-- Testimony <Invitation Only> --
EXECUTIVE SESSION: Performance Reviews
- Preliminary Reports: Alaska Student Loan Corp./
Alaska Commission on Post-Secondary Education
- Final: Dept. of Education & Early Development
EXECUTIVE SESSION: Audits
- Preliminary Reports: Dept. of Commerce,
Community & Economic Development, Alaska Regional
Development Organizations
- Finals - Dept. of Commerce, Community &
Economic Development:
Board of Certified Direct-Entry Midwives (Sunset)
Board of Registration for Architects, Engineers,
& Land Surveyors (Sunset);
Board of Veterinary Examiners (Sunset);
Regulatory Commission of AK, FY15 Annual Report
- Finals - Dept. of Administration - State Travel
Office; University of Alaska - University Travel
LEGISLATIVE REVISED PROGRAMS (RPLs):
- Dept. of Health & Social Services, Behavioral
Health Substance Abuse Grants (RPL 06-7-0283)
- Dept. of Natural Resources, Forest Inventory
and Analysis (RPL 10-7-5000)
- Dept. of Public Safety, Council on Domestic
Violence & Sexual Assault Grants (RPL 12-7-3004)
OTHER COMMITTEE BUSINESS
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                        October 17, 2016                                                                                        
                           10:11 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Chair                                                                                               
Representative Kurt Olson                                                                                                       
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson (via teleconference)                                                                              
Representative Sam Kito                                                                                                         
                                                                                                                                
Senator Anna MacKinnon, Vice Chair                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Click Bishop                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mark Neuman (alternate)                                                                                          
                                                                                                                                
Senator Cathy Giessel                                                                                                           
Senator Bert Stedman                                                                                                            
Senator Pete Kelly (alternate)                                                                                                  
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Mike Chenault                                                                                                    
Representative Laura Reinbold                                                                                                   
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF MINUTES                                                                                                             
EXECUTIVE SESSION                                                                                                               
ASLC/ACPE PERFORMANCE REVIEW                                                                                                    
DEED PERFORMANCE REVIEW                                                                                                         
AUDIT PRELIMINARY REPORTS                                                                                                       
AUDIT FINAL REPORTS                                                                                                             
LEGISLATIVE REVISED PROGRAMS (RPLS)                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Offered   her  recollection   regarding                                                             
attendance  during  the  approval   of  minutes  portion  of  the                                                               
Legislative Budget and Audit Committee meeting.                                                                                 
                                                                                                                                
JULI LUCKY, Staff                                                                                                               
Representative Mike Hawker                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Provided information related  to attendance                                                             
during the approval of minutes  portion of the Legislative Budget                                                               
and Audit Committee meeting.                                                                                                    
                                                                                                                                
DAVID TEAL, Legislative Fiscal Analyst                                                                                          
Legislative Finance Division                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Addressed three  RPLs for  the Legislative                                                             
Budget and Audit Committee.                                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:11:10 AM                                                                                                                   
                                                                                                                              
CHAIR  MIKE  HAWKER  called  the  Legislative  Budget  and  Audit                                                             
Committee  meeting  to order  at  10:11  a.m.   Senators  Bishop,                                                               
Hoffman, and  MacKinnon, and Representatives Kito,  Thompson (via                                                               
teleconference), and  Hawker were present  at the call  to order.                                                               
Representatives Olson  and Pruitt arrived  as the meeting  was in                                                               
progress.                                                                                                                       
                                                                                                                                
^Approval of Minutes                                                                                                            
                      Approval of Minutes                                                                                   
                                                                                                                              
10:13:35 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON moved  that the  minutes from  the Legislative                                                               
Budget  and  Audit  Committee  meeting on  August  18,  2016,  be                                                               
approved as presented.                                                                                                          
                                                                                                                                
10:13:53 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE THOMPSON  objected to  point out a  discrepancy in                                                               
the  attendance  reported in  the  August  18, 2016,  Legislative                                                               
Budget  and Audit  Committee minutes,  wherein  Senator Kelly  is                                                               
marked as  having been present in  one instance and as  absent in                                                               
another.                                                                                                                        
                                                                                                                                
10:14:38 AM                                                                                                                   
                                                                                                                                
CHAIR  HAWKER  offered  his  understanding  that  his  staff  had                                                               
acknowledged the issue and the discrepancy would be corrected.                                                                  
                                                                                                                                
10:15:08 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE THOMPSON removed his objection.                                                                                  
                                                                                                                                
10:15:13 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON withdrew  her motion that the  minutes from the                                                               
Legislative  Budget and  Audit Committee  meeting  on August  18,                                                               
2016, be approved as presented.                                                                                                 
                                                                                                                                
10:15:17 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON moved  that the  minutes from  the Legislative                                                               
Budget  and  Audit  Committee  meeting on  August  18,  2016,  be                                                               
approved, as amended to [correct the attendance].                                                                               
                                                                                                                                
10:15:47 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER objected for the purpose of discussion.                                                                            
                                                                                                                                
10:15:55 AM                                                                                                                   
                                                                                                                                
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Alaska State  Legislature, offered her recollection  that Senator                                                               
Kelly had not been in attendance at the meeting on 8/18/16.                                                                     
                                                                                                                                
10:16:04 AM                                                                                                                   
                                                                                                                                
JULI  LUCKY,  Staff,  Representative Mike  Hawker,  Alaska  State                                                               
Legislature,  offered her  understanding that  Senator Kelly  had                                                               
not been present during the  8/18/16 meeting, and she assured the                                                               
committee that the attendance record would be corrected.                                                                        
                                                                                                                                
CHAIR HAWKER offered his  interpretation that Senator MacKinnon's                                                               
motion was  to correct the  status of Senator  Kelly's attendance                                                               
during the August 18, 2016, meeting.                                                                                            
                                                                                                                                
10:17:01 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER withdrew his objection  to the motion to approve the                                                               
minutes from  the Legislative Budget and  Audit Committee meeting                                                               
on  August  18,  2016,  as  amended  to  correct  the  record  of                                                               
attendance.    There  being  no  further  objection,  it  was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
^Executive Session                                                                                                              
                       Executive Session                                                                                    
                                                                                                                              
10:17:48 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON moved  that the  Legislative Budget  and Audit                                                               
Committee  enter executive  session under  Uniform Rule  22(b)(3)                                                               
and AS  24.20.301 for  the discussion  of confidential  audit and                                                               
performance review reports.  There  being no objection, it was so                                                               
ordered.                                                                                                                        
                                                                                                                                
10:18:18 AM                                                                                                                   
                                                                                                                                
The committee  took an at-ease from  10:18 a.m. to 3:21  p.m. for                                                               
the purpose of the executive session.                                                                                           
                                                                                                                                
3:21:15 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER  called the Legislative  Budget and  Audit Committee                                                               
back to  order at 3:21  p.m.  Present at  the call back  to order                                                               
were    Senators   Bishop,    Hoffman,    and   MacKinnon,    and                                                               
Representatives  Kito,  Olson,   Thompson  (via  teleconference),                                                               
Pruitt, and Hawker.                                                                                                             
                                                                                                                                
^ASLC/ACPE Performance Review                                                                                                   
                  ASLC/ACPE Performance Review                                                                              
                                                                                                                              
3:22:25 PM                                                                                                                    
                                                                                                                                
SENATOR  MACKINNON moved  that the  committee release  the Alaska                                                               
Student  Loan  Corporation/Alaska  Commission  on  Post-Secondary                                                               
Education preliminary  performance review report to  the agencies                                                               
for response.  There being no objection, it was so ordered.                                                                     
                                                                                                                                
^DEED Performance Review                                                                                                        
                    DEED Performance Review                                                                                 
                                                                                                                              
3:22:53 PM                                                                                                                    
                                                                                                                                
SENATOR   MACKINNON  moved   that  the   committee  release   the                                                               
Department of  Education and Early Development  final performance                                                               
review report  to the public.   There being no objection,  it was                                                               
so ordered.                                                                                                                     
                                                                                                                                
^Audit Preliminary Reports                                                                                                      
                   Audit Preliminary Reports                                                                                
                                                                                                                              
3:23:31 PM                                                                                                                    
                                                                                                                                
SENATOR MACKINNON  moved that the following  preliminary audit be                                                               
released to  the agency  for response:   Department  of Commerce,                                                               
Community and  Economic Development, Alaska  Regional Development                                                               
Organizations.  There being no objection, it was so ordered.                                                                    
                                                                                                                                
^Audit Final Reports                                                                                                            
                      Audit Final Reports                                                                                   
                                                                                                                              
3:24:00 PM                                                                                                                    
                                                                                                                                
SENATOR  MACKINNON  moved  that  the following  final  audits  be                                                               
released  to  the public:  Department  of  Commerce, Community  &                                                               
Economic Development   Board of Certified  Direct Entry Midwives,                                                               
sunset; Department of Commerce,  Community & Economic Development                                                               
Board  of  Registration  for   Architects,  Engineers,  and  Land                                                               
Surveyors, sunset;  Department of Commerce, Community  & Economic                                                               
Development   Board of  Veterinary Examiners,  sunset; Department                                                               
of  Commerce,  Community  &   Economic  Development    Regulatory                                                               
Commission  of   Alaska  FY  15  annual   report;  Department  of                                                               
Administration  - State  Travel  Office; University  of Alaska  -                                                               
University Travel.   There being no objection, it  was so ordered                                                               
that those reports shall be released to the public.                                                                             
                                                                                                                                
^Legislative Revised Programs (RPLs)                                                                                            
              Legislative Revised Programs (RPLs)                                                                           
                                                                                                                              
3:25:28 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER  announced that  the committee  would take  up three                                                               
revised program(s) - legislative (RPLs).                                                                                        
                                                                                                                                
3:26:34 PM                                                                                                                    
                                                                                                                                
DAVID  TEAL,  Legislative  Fiscal  Analyst,  Legislative  Finance                                                               
Division,  Alaska  State Legislature,  at  the  request of  Chair                                                               
Hawker,  addressed the  three  RPLs before  the  committee.   The                                                               
first  was  RPL 06-7-0283,  from  the  Department of  Health  and                                                               
Social  Services (DHSS)  requesting $3,000,000  in federal  funds                                                               
for the  Division of Behavioral  Health and Substance Abuse.   He                                                               
said  it is  related to  opioid addiction  and the  department is                                                               
"out  of   federal  authorization."     He   suggested  questions                                                               
pertaining  to   this  RPL  would   be  best  addressed   to  the                                                               
department.   He  relayed that  the Legislative  Finance Division                                                               
asked  only whether  this money  would replace  the general  fund                                                               
money that was  appropriated last year.  He added,  "They are for                                                               
different purposes."                                                                                                            
                                                                                                                                
3:27:29 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER asked  - considering how late in the  year it is and                                                               
how rapidly the legislative session  is approaching - if the RPLs                                                               
should  be deferred  to  the legislature  to  address during  the                                                               
Thirtieth Legislative  Session or  if it  is appropriate  for the                                                               
Legislative Budget  and Audit Committee to  authorize the receipt                                                               
of these funds at this time.                                                                                                    
                                                                                                                                
MR. TEAL  answered that  the department  has requirements  to get                                                               
underway  rapidly  in January,  before  the  new session  begins;                                                               
therefore,  he said  he  thinks  "the case  is  pretty clear  for                                                               
approval before session."                                                                                                       
                                                                                                                                
3:28:46 PM                                                                                                                    
                                                                                                                                
MR. TEAL  next addressed  RPL 10-7-5000,  from the  Department of                                                               
Natural  Resources (DNR),  which requests  $1,147,500 in  federal                                                               
receipts to cover a grant for  Forest Inventory and Analysis.  He                                                               
explained  that  in   anticipation  of  a  motion   made  by  the                                                               
Legislative  Budget and  Audit Committee,  DNR made  a multi-year                                                               
request,  which  is  not  customary.   He  said  it  is  actually                                                               
confusing,  because the  Legislative Budget  and Audit  Committee                                                               
approves operating  money for one  year only  in most cases.   He                                                               
said  there  is  no  need  to appropriate  multiple  years.    He                                                               
indicated that  the department  has said it  is possible  to wait                                                               
for the  FY 17 money,  and "it's  certainly possible to  wait for                                                               
the  FY 18  and  19  money."   He  requested  that the  committee                                                               
clarify  whether it  is going  to change  the date  from multiple                                                               
years to a single year request for FY 17 only.                                                                                  
                                                                                                                                
3:30:13 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER said there are  other clarifications that need to be                                                               
made, as  well.  He  explained there  is an inconsistency  in the                                                               
RPL submitted  by DNR:   the first  sentence in the  statement of                                                               
purpose  [uses  the  term "capital  budget"],  while  the  matrix                                                               
[lists the  funding source as  "operating"].  Chair  Hawker asked                                                               
for confirmation that  the committee should make  clear that this                                                               
RPL relates to the operating budget - not the capital budget.                                                                   
                                                                                                                                
MR. TEAL  answered that is correct.   He said the  heading of the                                                               
RPL is correct  where it says "operating."   He acknowledged that                                                               
the  mention of  federal  authority in  the  capital budget  also                                                               
makes reference to Section 1  of the operating budget; therefore,                                                               
he  said he  thinks the  use  of the  word "capital"  was just  a                                                               
typographical error.                                                                                                            
                                                                                                                                
CHAIR HAWKER  said he would  also like clarification that  if the                                                               
Legislative Budget  and Audit  Committee makes  the appropriation                                                               
for  FY 17  only,  and it  leaves  the amount  the  same for  the                                                               
$1,147,500  in  federal  receipts, that  authority,  if  unspent,                                                               
"would last at the  end of FY 17," and then  the House and Senate                                                               
Finance  Committees would  have  the opportunity  to consider  an                                                               
appropriation in FY  18 and 19.  He summarized,  "So, leaving the                                                               
money the same is not going  to cause any problems.  If anything,                                                               
it  would  simply provide  for  a  bit  of excess  empty  federal                                                               
authority for ... the remainder of this fiscal year."                                                                           
                                                                                                                                
MR. TEAL  responded that  Chair Hawker is  correct, but  with one                                                               
additional factor, which is that  DNR believes it will spend most                                                               
of the  money in FY 17,  so it is  actually a good idea  to leave                                                               
the amount  as requested.   If the  department does not  need all                                                               
the money, then  it would lapse, and DNR would  take the issue up                                                               
again within the normal budget process for FY 18.                                                                               
                                                                                                                                
3:32:34 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER moved that RPL  10-7-5000 be interpreted as applying                                                               
as an  operating budget item,  and that the authority  granted by                                                               
the  RPL be  only for  the remainder  of FY  17 in  the operating                                                               
budget.    There  being  no objection,  RPL  10-7-5000  was  thus                                                               
amended.                                                                                                                        
                                                                                                                                
3:33:48 PM                                                                                                                    
                                                                                                                                
MR. TEAL  next addressed RPL  12-7-3004, which is a  request from                                                               
the Department  Public Safety (DPS) for  $1,000,000 in additional                                                               
federal  receipts to  coordinate, administer,  and monitor  funds                                                               
for the Council on Domestic  Violence and Sexual Assault (CDVSA).                                                               
He   explained  that   the  department   is   short  on   federal                                                               
authorization  and is  requesting authorization  that will  allow                                                               
the grants to be issued.                                                                                                        
                                                                                                                                
CHAIR HAWKER asked Mr. Teal to  confirm that although it does not                                                               
say so  specifically, the RPL  would apply only to  the remainder                                                               
of FY 17.                                                                                                                       
                                                                                                                                
MR. TEAL responded that is correct.                                                                                             
                                                                                                                                
3:35:13 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER  asked committee members  if they had  any questions                                                               
for the agencies regarding the RPLs.  [No response was given.]                                                                  
                                                                                                                                
3:35:23 PM                                                                                                                    
                                                                                                                                
SENATOR MACKINNON moved that the  committee approve the following                                                               
RPLs:   RPL 06-7-0283 Department  of Health and  Social Services,                                                               
Behavioral Health  Substance Abuse Grants for  $3,000,000 federal                                                               
receipts, fund code 1002, as  an operating budget item; RPL 10-7-                                                               
5000  Department  of  Natural  Resources,  Forest  Inventory  and                                                               
Analysis for $1,147,500  federal receipts, fund code  1002, as an                                                               
operating budget  item, as amended; and  RPL 12-7-3004 Department                                                               
of  Public  Safety,  Council  on  Domestic  Violence  and  Sexual                                                               
Assault Grants  for $1,000,000 federal receipts,  fund code 1002,                                                               
as an  operating budget item.   There being no objection,  it was                                                               
so ordered.                                                                                                                     
                                                                                                                                
3:36:56 PM                                                                                                                    
                                                                                                                                
CHAIR  HAWKER  relayed  that   the  committee  should  anticipate                                                               
meeting in  early December and  again in January,  shortly before                                                               
the start of the Thirtieth Legislative Session.                                                                                 
                                                                                                                                
3:37:56 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 3:38 p.m.                                                                                 
                                                                                                                                
3:38:56 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
3:39 p.m.                                                                                                                       

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