Legislature(2017 - 2018)HOUSE FINANCE 519

11/09/2017 08:00 AM LEGISLATIVE BUDGET & AUDIT

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Audio Topic
08:00:46 AM Start
08:01:19 AM Approval of Agenda
08:01:32 AM Approval of Minutes
08:02:47 AM Revised Program Legislative (rpls)
08:19:51 AM Executive Session
08:59:13 AM Preliminary and Final Audit Reports
09:00:03 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ RPL-06-8-0367 DHSS, Medical Assistance Program TELECONFERENCED
RPL-09-8-0106 DMVA, National Guard, Disaster
Relief Mission to U.S. Virgin Islands
RPL-12-8-3016 DPS, Council on Domestic Violence
& Sexual Assault
RPL-12-8-3013 DPS, Statewide Information
Technology Services
EXECUTIVE SESSION
Final Audit Release
- DCCED - Board of Certified Real Estate
Appraisers (Sunset)
Preliminary Audit Release
- DCCED - Board of Psychologist & Psychological
Examiners (Sunset)
- DCCED - Board of Massage Therapists (Sunset)
- DCCED - Marijuana Control Board (Sunset)
Other Committee Business
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                        November 9, 2017                                                                                        
                           8:00 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bert Stedman, Chair                                                                                                     
Senator Anna MacKinnon                                                                                                          
Senator Click Bishop                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Natasha von Imhof (alternate)                                                                                           
                                                                                                                                
Representative Andy Josephson, Vice Chair                                                                                       
Representative Scott Kawasaki                                                                                                   
Representative Paul Seaton                                                                                                      
Representative Ivy Spohnholz                                                                                                    
Representative Jennifer Johnston                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Cathy Giessel                                                                                                           
                                                                                                                                
Representative Dan Ortiz (alternate)                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF AGENDA                                                                                                              
APPROVAL OF MINUTES                                                                                                             
REVISED PROGRAM LEGISLATIVE (RPLS)                                                                                              
EXECUTIVE SESSION                                                                                                               
PRELIMINARY AND FINAL AUDIT REPORTS                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAVID TEAL, Legislative Fiscal Analyst                                                                                          
Legislative Finance Division                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information on RPLs to the Joint                                                                
Legislative Budget and Audit Committee.                                                                                         
                                                                                                                                
SHAWNDA O'BRIEN, Assistant Commissioner                                                                                         
Central Office                                                                                                                  
Finance Management Services                                                                                                     
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Answered  questions  during   the  Joint                                                             
Legislative Budget and Audit Committee discussion on RPLs.                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:00:46 AM                                                                                                                    
                                                                                                                                
CHAIR  BERT  STEDMAN  called the  Legislative  Budget  and  Audit                                                             
Committee  meeting to  order at  8:00 a.m.   Senators  MacKinnon,                                                               
Bishop,  Hoffman,   von  Imhof   (alternate),  and   Stedman  and                                                               
Representatives  Josephson,  Kawasaki,   Seaton,  Spohnholz,  and                                                               
Johnston were present at the call to order.                                                                                     
                                                                                                                                
^APPROVAL OF AGENDA                                                                                                             
                       APPROVAL OF AGENDA                                                                                   
                                                                                                                              
8:01:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  made  a motion  that  the  Legislative                                                               
Budget and  Audit Committee approve  the agenda.  There  being no                                                               
objection, the agenda was approved.                                                                                             
                                                                                                                                
^APPROVAL OF MINUTES                                                                                                            
                      APPROVAL OF MINUTES                                                                                   
                                                                                                                              
8:01:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON made a motion  to approve the minutes of                                                               
the Legislative  Budget and Audit Committee  meeting of September                                                               
7, 2017.  There being no  objection, the minutes from the meeting                                                               
of September 7, 2017, were approved.                                                                                            
                                                                                                                                
8:02:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON made a motion  to approve the minutes of                                                               
the Legislative Budget  and Audit Committee of  October 26, 2017.                                                               
There  being  no  objection,  the minutes  from  the  meeting  of                                                               
October 26, 2017, were approved.                                                                                                
                                                                                                                                
^REVISED PROGRAM LEGISLATIVE (RPLs)                                                                                             
               REVISED PROGRAM LEGISLATIVE (RPLs)                                                                           
                                                                                                                                
8:02:47 AM                                                                                                                    
                                                                                                                                
CHAIR STEDMAN announced that the  next order of business would be                                                               
revised program legislative (RPLs).                                                                                             
                                                                                                                                
8:03:09 AM                                                                                                                    
                                                                                                                                
DAVID  TEAL,  Legislative  Fiscal  Analyst,  Legislative  Finance                                                               
Division, Alaska  State Legislature, explained that  in RPL 06-8-                                                               
0367, the Department of Health  and Social Services requests $525                                                               
million in  federal receipts for the  Medical Assistance Program.                                                               
He said the  money would be split between  Indian Health Services                                                               
(IHS)  expansion and  non-expansion  and  Medicaid expansion  and                                                               
non-expansion.  He said expansion  counts for about 80 percent of                                                               
the funds.  He stated  that the Legislative Finance Division does                                                               
not  see any  technical issues.    Further, he  said the  request                                                               
comes as  no surprise to the  division, given a fiscal  year 2017                                                               
(FY  17)  supplemental   appropriation  of  approximately  $238.5                                                               
million and  then an FY  18 increase of  only $21.8 million.   He                                                               
explained  that  the  division expected  a  shortage  of  federal                                                               
funds.  Mr. Teal proffered that  there is information in the RPL,                                                               
which  is  not  information  that is  not  presently  before  the                                                               
committee,  but which  he interprets  as an  indication that  the                                                               
Legislative   Budget  and   Audit   Committee   might  expect   a                                                               
supplemental request for general  funds somewhere between $63 and                                                               
$100  million.   He clarified  that at  present, the  only amount                                                               
being requested is $525 million.                                                                                                
                                                                                                                                
8:05:05 AM                                                                                                                    
                                                                                                                                
CHAIR  STEDMAN asked  what the  impact of  declining the  request                                                               
would be.                                                                                                                       
                                                                                                                                
MR. TEAL answered  that the department would probably  run out of                                                               
federal  authority, which  may  mean that  providers  do not  get                                                               
paid.   He said a  delay in payment  would most likely  result in                                                               
the  committee receiving  the same  request in  the supplemental.                                                               
He said it  is a matter of  timing:  "They need  the money sooner                                                               
rather than later."                                                                                                             
                                                                                                                                
8:05:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked for  confirmation that  under the                                                               
RPL,  approximately   $400  million  of  the   $525  million  are                                                               
expansion dollars  that would, presumably, make  people healthier                                                               
and pay providers, and "those dollars come into the state."                                                                     
                                                                                                                                
MR. TEAL answered that's correct.                                                                                               
                                                                                                                                
8:06:24 AM                                                                                                                    
                                                                                                                                
SENATOR MACKINNON asked  Mr. Teal to confirm whether  there is an                                                               
authorized  system -  a  Medicaid system  that  has already  been                                                               
approved.                                                                                                                       
                                                                                                                                
MR. TEAL  offered his  understanding that  that process  is over.                                                               
He  said,  "That's  kind  of a  two-year-old  problem,  with  new                                                               
[information  technology]  (IT)  systems   and  approval  by  the                                                               
[federal government]  ("feds") of  reimbursements, and  I believe                                                               
all that's  cleared up."   He  deferred to  the department  for a                                                               
more definitive answer.                                                                                                         
                                                                                                                                
SENATOR  MACKINNON  said   she  would  like  to   hear  from  the                                                               
department, because "that  was not certified at  the beginning of                                                               
this  year,  and   we  were  still  under   review  with  federal                                                               
auditing."                                                                                                                      
                                                                                                                                
8:07:20 AM                                                                                                                    
                                                                                                                                
SHAWNDA O'BRIEN, Assistant  Commissioner, Central Office, Finance                                                               
Management  Services, Department  of Health  and Social  Services                                                               
(DHSS), said the department has  been working for quite some time                                                               
with the  Centers for Medicare  & Medicaid Services (CMS)  to get                                                               
the certification  of the Medicaid Management  Information System                                                               
(MMIS).   She  said the  department  believed it  would have  the                                                               
certification  by early  FY 18;  however, because  of changes  in                                                               
leadership,  the department  has been  given a  corrective action                                                               
plan,  which  must  be  completed  by December.    She  said  the                                                               
department believes the certification will  be done by the end of                                                               
December.                                                                                                                       
                                                                                                                                
SENATOR MACKINNON remarked that  the auditors would have concerns                                                               
if  they cannot  audit  the  system.   She  recollected that  the                                                               
Legislative Budget  and Audit  Committee had  been told  that the                                                               
system would be certified last summer,  and then it had been told                                                               
that  certification would  be  completed by  January  2017.   She                                                               
stated that she does not  want to vote against providing services                                                               
to Alaskans,  but she  cautioned that  the necessary  funds could                                                               
increase.   She  emphasized that  the auditors  cannot conduct  a                                                               
compliance check until the system is certified.                                                                                 
                                                                                                                                
CHAIR  STEDMAN  advised that  the  Legislative  Budget and  Audit                                                               
Committee should  move forward with  the RPL and bring  the issue                                                               
discussed by Senator Mackinnon into  the Senate Finance Committee                                                               
and  House Finance  Committee for  discussion of  the legislative                                                               
budget process.                                                                                                                 
                                                                                                                                
8:09:41 AM                                                                                                                    
                                                                                                                                
SENATOR  VON IMHOF  asked if  the  audit would  look at  Medicaid                                                               
eligibility, processing speed, and backlog.                                                                                     
                                                                                                                                
8:10:06 AM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 8:10 a.m.                                                                                 
                                                                                                                                
8:10:31 AM                                                                                                                    
                                                                                                                                
SENATOR VON IMHOF  allowed that the question she  had asked prior                                                               
to the at-ease had been premature and could be taken up later.                                                                  
                                                                                                                                
8:10:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ asked  Ms.  O'Brien if  there were  new                                                               
standards  or questions  raised when  the administration  changed                                                               
that may have extended the deadline.                                                                                            
                                                                                                                                
MS.  O'BRIEN  offered  her understanding  that  the  issues  with                                                               
certification were  not related to the  change in administration.                                                               
She continued:                                                                                                                  
                                                                                                                                
     But there's new  leadership in CMS, and  I believe that                                                                    
     they  had  an opportunity  to  review  some things  and                                                                    
     maybe had a  few more requirements that  they wanted to                                                                    
     address.    But  we've been  given  communication  that                                                                    
     indicates that  they don't  believe that  there's going                                                                    
     to be any problem with  us demonstrating that we've met                                                                    
     those requirements; it's just a  timing issue.  And so,                                                                    
     we've  been working  pretty regularly  in communicating                                                                    
     very   frequently  with   CMS  on   the  certification;                                                                    
     particularly  we had  some communication  early in  the                                                                    
     summer that indicated that  we would have certification                                                                    
     by August, but ... it was delayed.                                                                                         
                                                                                                                                
8:12:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit Committee  approve RPL 06-8-0367, Department  of Health and                                                               
Social  Services, Medical  Assistance  Program,  $525 million  in                                                               
federal  receipts,  fund  code  1002, as  a  supplemental  FY  18                                                               
operating  budget item.   There  being  no objection,  it was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
8:13:07 AM                                                                                                                    
                                                                                                                                
MR. TEAL  next discussed  RPL 09-8-0106,  which was  submitted by                                                               
the  Department  of  Military  &  Veterans'  Affairs  to  request                                                               
authority to receive and spend  $1 million in federal receipts to                                                               
reimburse  costs associated  with  deploying  60 Alaska  National                                                               
Guard members  to the Virgin  Islands to help with  the aftermath                                                               
of Hurricane Irma.  He  said the deployment already occurred, and                                                               
the urgency  in this case is  that the money is  needed to ensure                                                               
personnel are paid in a timely manner.                                                                                          
                                                                                                                                
CHAIR   STEDMAN  commented   that   this  would   be  a   federal                                                               
disbursement.                                                                                                                   
                                                                                                                                
MR. TEAL answered that's correct.                                                                                               
                                                                                                                                
8:13:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit Committee  approve RPL 09-8-0106, Department  of Military &                                                               
Veterans'  Affairs,  State  Active  Duty,  $1  million  statutory                                                               
designated program  receipts, fund  code 1008, as  a supplemental                                                               
FY 18  operating budget item.   There being no objection,  it was                                                               
so ordered.                                                                                                                     
                                                                                                                                
8:14:29 AM                                                                                                                    
                                                                                                                                
MR. TEAL  next explained RPL  12-8-3016, in which  the Department                                                               
of  Public Safety  (DPS)  requests $2  million  in federal  grant                                                               
receipts for domestic violence programs.   He said the grants are                                                               
complicated by the fact that  they come from four primary sources                                                               
in amounts  that change  from year  to year.   Further,  they are                                                               
often multi-year  grants that overlap,  which makes  it difficult                                                               
to determine how  much money is available for  a particular year.                                                               
He stated that DPS intends  to improve service by better managing                                                               
the grants.   He explained, "The primary issue here  is that they                                                               
can't  spend  the  grants  they   have  without  an  increase  in                                                               
authorization, which  is what this RPL  is asking for."   He said                                                               
DPS  anticipates  requesting  an  increase  of  approximately  $4                                                               
million  in federal  receipt authority  in the  FY 19  governor's                                                               
request.   He  said no  additional general  funds are  associated                                                               
with this additional grant money.                                                                                               
                                                                                                                                
8:15:51 AM                                                                                                                    
                                                                                                                                
SENATOR  MACKINNON stated  that when  the administration  changed                                                               
Council  on   Domestic  Violence   and  Sexual   Assault  (CDVSA)                                                               
leadership  last  year,  it  said  there  would  be  a  plan  for                                                               
combatting domestic violence  and sexual assault in  Alaska.  She                                                               
said she  has not  seen such a  plan.  She  relayed that  she had                                                               
spoken briefly with the new  administrator and director of CDVSA.                                                               
She emphasized  how big an  issue this is.   She said there  is a                                                               
national  conversation going  on, particularly  in regard  to the                                                               
treatment of  women, who  are 90  percent more  likely to  be the                                                               
victim of violence or sexual  assault, although she said violence                                                               
is also  perpetrated against  males.  She  explained that  she is                                                               
making  the point  that the  administration owes  the Legislative                                                               
Budget and  Audit Committee  the plan  and although  she supports                                                               
the   RPL,   she  would   like   additional   details  from   the                                                               
administration.                                                                                                                 
                                                                                                                                
CHAIR  STEDMAN suggested  that this  may  be a  topic of  immense                                                               
public interest  that could warrant  meetings in both  bodies, at                                                               
which time the department could provide information.                                                                            
                                                                                                                                
8:17:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit  Committee  approve  RPL 12-8-3016,  Department  of  Public                                                               
Safety,  Council   on  Domestic  Violence  and   Sexual  Assault,                                                               
$2,004,750   in  federal   receipts,   fund  code   1002,  as   a                                                               
supplemental  FY  18  operating  budget item.    There  being  no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
8:18:24 AM                                                                                                                    
                                                                                                                                
MR. TEAL explained RPL 12-8-3013  was submitted by DPS to request                                                               
$1 million  to allow the agency  to spend a portion  of a federal                                                               
grant  to improve  the criminal  record system  in Alaska,  which                                                               
would bring  the state  into compliance  with Federal  Borough of                                                               
Investigation (FBI) requirements.  He  said the same amount would                                                               
be  requested in  the FY  19  budget and  "presumably later  than                                                               
that, since the deadline for compliance  is January of 2021."  He                                                               
said there  are no  new positions  and there  is no  general fund                                                               
associated with  this, and the Legislative  Finance Division sees                                                               
no technical issues with this RPL.                                                                                              
                                                                                                                                
8:19:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit  Committee  approve  RPL 12-8-3013,  Department  of  Public                                                               
Safety, Statewide Information Technology  Services, $1 million in                                                               
federal  receipts,  fund  code  1002, as  a  supplemental  FY  18                                                               
operating  budget item.   There  being  no objection,  it was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
^EXECUTIVE SESSION                                                                                                              
                       EXECUTIVE SESSION                                                                                    
                                                                                                                              
8:19:51 AM                                                                                                                    
                                                                                                                                
CHAIR STEDMAN announced that the  next order of business would be                                                               
to move into executive session.                                                                                                 
                                                                                                                                
8:20:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit Committee go  into executive session under  Uniform Rule 22                                                               
for the  purpose of discussing  confidential audit  reports under                                                               
AS 24.20.301.  He asked  that the following individuals remain in                                                               
the room  or on  line:  Kris  Curtis, necessary  committee staff,                                                               
any  legislators   not  on  the  Legislative   Budget  and  Audit                                                               
Committee,  and  any  legislative  staff  working  for  committee                                                               
members.   There  being  no objection,  the  committee went  into                                                               
executive session at 8:20 a.m.                                                                                                  
                                                                                                                                
8:20:31 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:20 a.m. to 8:58 a.m.                                                                       
                                                                                                                                
8:58:26 AM                                                                                                                    
                                                                                                                                
CHAIR STEDMAN  called the  committee back to  order at  8:58 a.m.                                                               
Senators MacKinnon,  Bishop, von  Imhof (alternate),  and Stedman                                                               
and Representatives  Josephson, Kawasaki, Seaton,  Spohnholz, and                                                               
Johnston were present at the call back to order.                                                                                
                                                                                                                                
^PRELIMINARY AND FINAL AUDIT REPORTS                                                                                            
              PRELIMINARY AND FINAL AUDIT REPORTS                                                                           
                                                                                                                              
8:59:13 AM                                                                                                                    
                                                                                                                                
CHAIR STEDMAN  announced that the  final order of  business would                                                               
be  the  preliminary and  final  audit  reports discussed  during                                                               
executive session.                                                                                                              
                                                                                                                                
8:59:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit Committee  release the following preliminary  audits to the                                                               
appropriate  agencies  for  response:   Department  of  Commerce,                                                               
Community  & Economic  Development,  Board  of Psychologists  and                                                               
Psychological  Examiners;  Department  of Commerce,  Community  &                                                               
Economic   Development,   Board   of  Massage   Therapists;   and                                                               
Department  of   Commerce,  Community  &   Economic  Development,                                                               
Marijuana Control  Board.   There being no  objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
8:59:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  moved that  the Legislative  Budget and                                                               
Audit Committee  release the following  final audit:   Department                                                               
of  Commerce,   Community  &   Economic  Development,   Board  of                                                               
Certified Real Estate  Appraisers.  There being  no objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
9:00:03 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
9:00 a.m.                                                                                                                       

Document Name Date/Time Subjects
DRAFT AGENDA 11.9.17.pdf JBUD 11/9/2017 8:00:00 AM
LBA Agenda for 11.9.17
jbud 090717 0203 PM.pdf JBUD 11/9/2017 8:00:00 AM
Draft Meeting Minutes for 9.7.17
jbud 102617 0905 AM.pdf JBUD 11/9/2017 8:00:00 AM
Draft Meeting Minutes for 10.26.17
November 9 2017 Complete RPL Packet.pdf JBUD 11/9/2017 8:00:00 AM
Complete RPL Packet