Legislature(2015 - 2016)ANCH BENSON BLDG

12/13/2016 01:00 PM LEGISLATIVE BUDGET & AUDIT

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Audio Topic
01:04:05 PM Start
01:07:24 PM Approval of Minutes
01:07:50 PM Special Audit Requests
01:18:23 PM Executive Session
02:32:55 PM Aslc/acpe Performance Review
02:33:25 PM Audit Preliminary Reports
02:34:30 PM Other Committee Business
02:35:39 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Location: Large Conference Room
+ SPECIAL AUDIT REQUESTS: TELECONFERENCED
- Medicaid Travel Costs
- Alaska Mental Health Trust Authority
- Alaska Gasline Development Corporation
EXECUTIVE SESSION: Performance Reviews - Final
- Alaska Student Loan Corp./Alaska Commission on
Post-Secondary Education
EXECUTIVE SESSION: Audits - Preliminary
- Dept. of Health & Social Services - Alaska
Health Care Commission (Sunset)
- Dept. of Public Safety - Alaska Scientific
Crime Detection Laboratory Select Issues
EXECUTIVE SESSION: Audits - Final
- Dept. of Commerce, Community & Economic
Development - Alaska Regional Development
Organizations
- Other Committee Business
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                       December 13, 2016                                                                                        
                           1:04 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Chair                                                                                               
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
Senator Cathy Giessel                                                                                                           
Senator Click Bishop                                                                                                            
Senator Pete Kelly (Alternate)                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Kurt Olson                                                                                                       
Representative Mark Neuman (Alternate)                                                                                          
                                                                                                                                
Senator Anna MacKinnon, Vice Chair                                                                                              
Senator Bert Stedman                                                                                                            
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Andy Josephson                                                                                                   
Representative Lora Reinbold                                                                                                    
                                                                                                                                
Senator Berta Gardner                                                                                                           
Senator Gary Stevens                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF MINUTES                                                                                                             
SPECIAL AUDIT REQUESTS                                                                                                          
EXECUTIVE SESSION                                                                                                               
ASLC/ACPE PERFORMANCE REVIEW                                                                                                    
AUDIT PERFORMANCE REPORTS                                                                                                       
AUDIT FINAL REPORT                                                                                                              
OTHER COMMITTEE BUSINESS                                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Addressed the  audits before the Legislative                                                             
Budget and Audit Committee.                                                                                                     
                                                                                                                                
LINDA DAY, Audit Manager                                                                                                        
Legislative Audit Staff Anchorage                                                                                               
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered a  question during the audit review                                                             
related  to  Medicaid  and Children's  Health  Insurance  Program                                                               
Travel Costs.                                                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:04:05 PM                                                                                                                    
                                                                                                                                
CHAIR  MIKE  HAWKER  called  the  Legislative  Budget  and  Audit                                                             
Committee meeting  to order  at 1:04  p.m.   Representatives Kito                                                               
and  Hawker and  Senators Bishop  (via teleconference),  Giessel,                                                               
Hoffman  (via  teleconference),  and Kelly  (via  teleconference)                                                               
(Alternate) were present  at the call to  order.  Representatives                                                               
Thompson (via  teleconference) and Pruitt arrived  as the meeting                                                               
was  in progress.   Also  present were  Representatives Josephson                                                               
and Reinbold and Senator Stevens.                                                                                               
                                                                                                                                
CHAIR HAWKER  acknowledged the  passing of  former Representative                                                               
Mike Kelly  and offered condolences  to Senator (Pete)  Kelly and                                                               
his family.                                                                                                                     
                                                                                                                                
^APPROVAL OF MINUTES                                                                                                            
                      APPROVAL OF MINUTES                                                                                   
                                                                                                                                
1:07:24 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved that  the  minutes  from the  Legislative                                                               
Budget  and  Audit Committee  meeting  of  October 17,  2016,  be                                                               
approved.  There being no objection, the minutes were approved.                                                                 
                                                                                                                                
^SPECIAL AUDIT REQUESTS                                                                                                         
                     SPECIAL AUDIT REQUESTS                                                                                 
                                                                                                                                
1:07:50 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
audit requests.   He noted the  first request was related  to the                                                               
Medicaid  and Children's  Health Insurance  Program Travel  Costs                                                               
and would  serve to highlight what  they are, how they  have been                                                               
working, and how they might be improved.                                                                                        
                                                                                                                                
1:09:19 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Legislative Agencies  and Offices,  in response to  Chair Hawker,                                                               
confirmed  that she  had  participated in  the  drafting of  this                                                               
specific  request  and  that  the language  of  the  request  was                                                               
"adequate and appropriate" for the  purpose of her undertaking an                                                               
examination for the purposes stated.                                                                                            
                                                                                                                                
1:09:47 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  directed  attention  to [a  memorandum  to  the                                                               
Legislative Budget  and Audit Committee from  Representative Mike                                                               
Hawker, Chair, dated December 2,  2016, included in the committee                                                               
packet], and  specifically highlighted the language  in the first                                                               
bullet  point  on  the  second  page  of  the  memorandum.    She                                                               
paraphrased  the  paragraph,  which   read  in  its  entirety  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Determine whether the  prior authorization and referral                                                                    
     process  for  Medicaid  travel  could  be  improved  to                                                                    
     ensure the  lowest travel costs  are obtained  with the                                                                    
     emphasis on  booking travel  in advance  when possible.                                                                    
     As   a   part   of  this   objective,   review   ticket                                                                    
     cancelations and reissuances.                                                                                              
                                                                                                                                
SENATOR  GIESSEL questioned  whether the  auditor could  consider                                                               
geographic areas and whether there may  be one area more prone to                                                               
cancelations than  another.  Further,  she questioned  whether it                                                               
would  be possible  to evaluate  travel that  occurred but  ended                                                               
with a "no-show" to an appointment.                                                                                             
                                                                                                                                
1:10:53 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS offered  her understanding  that Senator  Giessel was                                                               
referring  to travel  that occurred  where no  services happened.                                                               
She said  she had looked at  other states that do  that and would                                                               
be considering that in the review of the audit.                                                                                 
                                                                                                                                
1:11:12 PM                                                                                                                    
                                                                                                                                
SENATOR  HOFFMAN  asked  what percentage  of  the  dollars  being                                                               
audited are federal and what percentage are state.                                                                              
                                                                                                                                
MS.  CURTIS  deferred  to  Linda   Day,  the  audit  manager  who                                                               
performed the travel audit.                                                                                                     
                                                                                                                                
1:11:43 PM                                                                                                                    
                                                                                                                                
LINDA  DAY, Audit  Manager,  Legislative  Audit Staff  Anchorage,                                                               
Legislative  Audit Division,  Legislative  Agencies and  Offices,                                                               
relayed  that there  were approximately  $80 million  in Medicaid                                                               
travel costs, and typically the  reimbursement rate is 50 percent                                                               
federal and 50 percent state.                                                                                                   
                                                                                                                                
1:12:30 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER noted  that the next audit request  would be related                                                               
to the  Alaska Mental  Health Trust Authority.   He  explained he                                                               
brought this  request to  the committee as  a result  of concerns                                                               
that  have  been raised  regarding  various  authorities and  the                                                               
discharge  to those  authorities, with  regard to  operations and                                                               
management of the  land office in the Alaska  Mental Health Trust                                                               
Authority.  He  explained the request to the state  auditor is to                                                               
examine  these   issues,  the  policies,  and   the  statutes  to                                                               
determine  traditional compliance.    He emphasized  that in  the                                                               
time this  issue was  brought to  his attention,  it had  "made a                                                               
certain  show  in  the  media," and  he  spoke  with  individuals                                                               
involved with  the trust, who  assured him they are  taking steps                                                               
to  remedy some  of  the errant  concerns.   He  stated that  the                                                               
intent of  the audit is to  document whether or not  the concerns                                                               
are valid  and, beyond that,  to document the  process procedures                                                               
in  place and  being  taken  by the  Alaska  Mental Health  Trust                                                               
Authority to remedy any concerns that exist.                                                                                    
                                                                                                                                
1:13:55 PM                                                                                                                    
                                                                                                                                
MS. CURTIS, in  response to Chair Hawker, confirmed  that she had                                                               
neither concern  regarding the  scope in  the audit  request, nor                                                               
doubt about her ability to comply with said request.                                                                            
                                                                                                                                
1:14:16 PM                                                                                                                    
                                                                                                                                
CHAIR  HAWKER noted  the last  audit request  was related  to the                                                               
Alaska  Gasline   Development  Corporation  (AGDC),   which  asks                                                               
auditors to look  at various aspects related  to the transactions                                                               
and  funding of  AGDC.   He  said he  personally takes  a lot  of                                                               
interest in this issue, because  it was his own legislation which                                                               
created AGDC  as a standalone  state corporation.  He  noted that                                                               
he  would be  leaving the  legislature  after this  year, and  in                                                               
concurrence with Senator Giessel, who  is the chair of the Senate                                                               
Resources  Standing Committee,  wanted to  perform this  audit to                                                               
obtain a  formal report  on what  has transpired  with AGDC.   He                                                               
explained that there have been quite  a few changes over the last                                                               
few  years  over  how  the  legislature had  intended  it  to  be                                                               
established and  function.  He  said he  would like to  leave the                                                               
state with  a historic record  of "how we  got to this  point and                                                               
where we are at as it now moves off into the future."                                                                           
                                                                                                                                
1:16:01 PM                                                                                                                    
                                                                                                                                
MS.  CURTIS,  in  response  to  Chair Hawker,  said  she  has  no                                                               
concerns regarding the audit request as presented.                                                                              
                                                                                                                                
1:16:32 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  approve  the request  for  an  audit of  Medicaid  and                                                               
Children's Health  Insurance Program  Travel Costs.   There being                                                               
no objection, it was so ordered.                                                                                                
                                                                                                                                
1:17:01 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee approve the  request for an audit of  the Alaska Mental                                                               
Health  Trust Authority.   There  being no  objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
1:17:30 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee approve the request for  an audit of the Alaska Gasline                                                               
Development Corporation.   There  being no  objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
CHAIR  HAWKER thanked  everyone who  had helped  draft the  audit                                                               
requests.                                                                                                                       
                                                                                                                                
^EXECUTIVE SESSION                                                                                                              
                       EXECUTIVE SESSION                                                                                    
                                                                                                                                
1:18:23 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
the   executive   session   for  the   purpose   of   discussing:                                                               
Performance    Reviews    -    Final,   Alaska    Student    Loan                                                               
Corporation/Alaska   Commission   on  Post-Secondary   Education;                                                               
Audits  - Preliminary  Reports, Department  of Health  and Social                                                               
Services, Alaska  Health Care Commission (Sunset)  and Department                                                               
of Public  Safety, Alaska  Scientific Crime  Detection Laboratory                                                               
Select  Issues;  and  Audits -  Final,  Department  of  Commerce,                                                               
Community  & Economic  Development,  Alaska Regional  Development                                                               
Organizations.                                                                                                                  
                                                                                                                                
1:19:15 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  enter  into  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.                                                                                                              
                                                                                                                                
1:19:44 PM                                                                                                                    
                                                                                                                                
The committee  took an at-ease  from 1:20  p.m. to 2:31  p.m. for                                                               
the purpose of executive session.                                                                                               
                                                                                                                                
2:31:08 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER  called the Legislative  Budget and  Audit Committee                                                               
back to order  at 2:31 p.m.  Representatives  Kito, Thompson (via                                                               
teleconference),  Pruitt, and  Hawker, and  Senators Bishop  (via                                                               
teleconference), Giessel,  and Hoffman (via  teleconference) were                                                               
present  at  the   call  back  to  order.     Also  present  were                                                               
Representative Reinbold and Senators Gardner and Stevens.                                                                       
                                                                                                                                
^ASLC/ACPE PERFORMANCE REVIEW                                                                                                   
                  ASLC/ACPE PERFORMANCE REVIEW                                                                              
                                                                                                                                
2:32:55 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  release  the  Alaska Student  Loan  Corporation/Alaska                                                               
Commission on  Post-Secondary Education final  performance review                                                               
report  to the  public.   There  being no  objection,  it was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
^AUDIT PRELIMINARY REPORTS                                                                                                      
                   AUDIT PRELIMINARY REPORTS                                                                                
                                                                                                                                
2:33:25 PM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL  moved that the  following preliminary  audits be                                                               
released to the agencies for  response:  Department of Health and                                                               
Social  Services  -  Alaska   Health  Care  Commission  (Sunset);                                                               
Department of  Public Safety - Alaska  Scientific Crime Detection                                                               
Laboratory Select  Issues.  There  being no objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
2:34:06 PM                                                                                                                    
                                                                                                                                
^AUDIT FINAL REPORT                                                                                                             
                       AUDIT FINAL REPORT                                                                                   
                                                                                                                                
GIESSEL moved that  the following final audit be  released to the                                                               
public:     Department   of   Commerce,   Community  &   Economic                                                               
Development,  Alaska Regional  Development Organizations.   There                                                               
being no objection, it was so ordered.                                                                                          
                                                                                                                                
^OTHER COMMITTEE BUSINESS                                                                                                       
                    OTHER COMMITTEE BUSINESS                                                                                
                                                                                                                                
2:34:30 PM                                                                                                                    
                                                                                                                                
CHAIR  HAWKER announced  that the  Legislative  Budget and  Audit                                                               
Committee would meet  again in approximately 30  days, just prior                                                               
to the start of the Thirtieth Alaska State Legislative Session.                                                                 
                                                                                                                                
2:35:23 PM                                                                                                                    
                                                                                                                                
CHAIR HAWKER ascertained  that Ms. Curtis had  nothing further to                                                               
state.                                                                                                                          
                                                                                                                                
2:35:39 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
2:36 p.m.                                                                                                                       

Document Name Date/Time Subjects
Agenda.pdf JBUD 12/13/2016 1:00:00 PM
IV. Medicaid-CHIP Travel Audit Request.pdf JBUD 12/13/2016 1:00:00 PM
IV. AMHTA Audit Request.pdf JBUD 12/13/2016 1:00:00 PM
IV. AMHTA Audit Request - Background.pdf JBUD 12/13/2016 1:00:00 PM
IV. AGDC Audit Request.pdf JBUD 12/13/2016 1:00:00 PM