Legislature(2017 - 2018)Anch LIO Lg Conf Rm

12/13/2018 10:00 AM LEGISLATIVE BUDGET & AUDIT

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Audio Topic
10:04:46 AM Start
10:06:10 AM Approval of the Agenda
10:06:57 AM Approval of Minutes
10:07:21 AM Approval of Rpl(s)
10:31:28 AM Special Audit Requests
11:01:14 AM Executive Session
12:24:51 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ RPLs TELECONFERENCED
a. RPL - 02-9-0056, DOA, Court Appointed Special
Advocate
b. RPL - 08-9-0121, DCCED, Center for Medicaid
Services Flexibility Grant
c. RPL - 20-9-0035, DOC, Bureau of Justice
Assistance Grant
<Above Item Removed from Agenda>
d. RPL - 20-9-0044, DOC, Residential Substance
Abuse Grant
e. RPL - 05-9-0045, DEED, Arts in Education
Grants
f. RPL - 18-9-0374, DEC, Remodel Costs, Federal
Receipts
g. RPL - 09-9-0068, DMVA, Alaska Military Youth
Academy
<Above Item Removed from Agenda>
h. RPL - 09-9-0113, DMVA, Homeland Security
i. RPL - 12-9-3040, DPS, Laboratory Services
j. RPL - 12-9-3050, DPS, Federal Receipt
Authority
k. RPL - 25-9-8623, DOT, Federal Emergency
Projects
Special Audit Requests
a. Dept. of Health and Social Services, Office of
Children's Services (HB 151)
Final and Preliminary Audit Reports:
EXECUTIVE SESSION
a. Final Audits Release
1. Dept. of Commerce, Community, and Economic
Development, Board of Barbers and Hairdressers
2. Dept. of Commerce, Community, and Economic
Development, Board of Dental Examiners
3. Dept. of Commerce, Community, and Economic
Development, Board of Nursing
4. Dept. of Health and Social Services, Statewide
Suicide Prevention Council
5. Dept. of Natural Resources, Matanuska Maid
Select Property Disposal
6. Dept. of Administration, Statewide Single
Audit, FY15 - reissue
b. Preliminary Audit Release
1. Alaska Gasline Development Corporation, Select
Financial Issues
2. Dept. of Commerce, Community, and Economic
Development, Big Game Commercial Services Board
Other Committee Business
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                       December 13, 2018                                                                                        
                           10:04 a.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bert Stedman, Chair                                                                                                     
Senator Anna MacKinnon (via teleconference)                                                                                     
Senator Cathy Giessel                                                                                                           
Senator Click Bishop (via teleconference)                                                                                       
Senator Natasha von Imhof (alternate)                                                                                           
                                                                                                                                
Representative Andy Josephson, Vice Chair (via teleconference)                                                                  
Representative Paul Seaton                                                                                                      
Representative Jennifer Johnston                                                                                                
Representative Dan Ortiz (alternate)                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
Representative Scott Kawasaki                                                                                                   
Representative Ivy Spohnholz                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF THE AGENDA                                                                                                          
APPROVAL OF MINUTES                                                                                                             
APPROVAL OF RPL(S)                                                                                                              
SPECIAL AUDIT REQUESTS                                                                                                          
APPROVAL OF SPECIAL AUDIT REQUEST                                                                                               
EXECUTIVE SESSION                                                                                                               
FINAL AUDIT REPORTS                                                                                                             
PRELIMINARY AUDIT REPORTS                                                                                                       
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
AMANDA RYDER, Fiscal Analyst                                                                                                    
Legislative Finance Division                                                                                                    
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified and answered questions on RPLs.                                                                
                                                                                                                                
ROB CARPENTER, Fiscal Analyst                                                                                                   
Legislative Finance Division                                                                                                    
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on RPL 25-9-8623.                                                                     
                                                                                                                                
REPRESENTATIVE LES GARA                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Testified  during  the  discussion of  the                                                             
special audit request DHSS (HB 151).                                                                                            
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Testified  and answered  questions on  the                                                             
special audit  request for  the Department  of Health  and Social                                                               
Services, Office of Children's Services.                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:04:46 AM                                                                                                                   
                                                                                                                                
CHAIR  BERT  STEDMAN  called the  Legislative  Budget  and  Audit                                                             
Committee  meeting  to  order  at  10:04  a.m.    Representatives                                                               
Seaton,  Johnston,  Josephson  (via  teleconference),  and  Ortiz                                                               
(alternate),    and    Senators     Stedman,    MacKinnon    (via                                                               
teleconference),  Bishop (via  teleconference), Giessel,  and Von                                                               
Imhof (alternate) were present at the call to order.                                                                            
                                                                                                                                
^APPROVAL OF THE AGENDA                                                                                                         
                     APPROVAL OF THE AGENDA                                                                                 
                                                                                                                                
10:06:10 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN  announced that the  first order of  business would                                                               
be the approval of the agenda.                                                                                                  
                                                                                                                                
10:06:20 AM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee approve the agenda.                                                                                                   
                                                                                                                                
10:06:32 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN objected for the  purpose of discussion.  He stated                                                               
that  during the  executive session  the committee  will consider                                                               
preliminary audits before the final audits.                                                                                     
                                                                                                                                
10:06:43 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN removed  his objection.   There  being no  further                                                               
objection, the agenda, as revised, was approved.                                                                                
                                                                                                                                
^APPROVAL OF MINUTES                                                                                                            
                      APPROVAL OF MINUTES                                                                                   
                                                                                                                                
10:06:57 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN announced that the  next order of business would be                                                               
the approval of minutes.                                                                                                        
                                                                                                                                
10:07:06 AM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee approve the minutes of  the October 9, 2018 meeting, as                                                               
presented.  There being no  objection, the minutes of the October                                                               
9, 2018, meeting were approved.                                                                                                 
                                                                                                                                
^APPROVAL OF RPL(s)                                                                                                             
                       APPROVAL OF RPL(s)                                                                                   
                                                                                                                                
10:07:21 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN announced that the  next order of business would be                                                               
the approval of the Revised Program Legislative (RPLs).                                                                         
                                                                                                                                
10:07:47 AM                                                                                                                   
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
10:09:07 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN announced  the first  order of  business for  RPLs                                                               
would  be  agenda item  IV.  (a)-(i).    He  asked Ms.  Ryder  to                                                               
introduce the first RPL.                                                                                                        
                                                                                                                                
10:09:47 AM                                                                                                                   
                                                                                                                                
AMANDA  RYDER,  Fiscal  Analyst,  Legislative  Finance  Division,                                                               
Legislative  Agencies and  Offices,  offered to  provide a  brief                                                               
summary of each RPL and pause for questions.                                                                                    
                                                                                                                                
MS.  RYDER explained  that RPL  02-9-0056, the  Office of  Public                                                               
Advocacy  (OPA),  Department  of Administration  (DOA),  requests                                                               
$144,700 of  federal receipt authority.   OPA received  a federal                                                               
grant  totaling  $600,661  over  three  years  from  fiscal  year                                                               
2019-2021 (FY  19-21) to address  the opioid epidemic  in Alaska.                                                               
She  stated that  no  match  is required.    She  said a  similar                                                               
request is  expected in the [FY  20] budget for the  remainder of                                                               
the grant.                                                                                                                      
                                                                                                                                
10:10:26 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked  whether there were any questions  on RPL 02-                                                               
9-0056 and there were none.  He moved to the next RPL.                                                                          
                                                                                                                                
10:10:30 AM                                                                                                                   
                                                                                                                                
MS.  RYDER   explained  that  RPL  08-9-0121,   the  Division  of                                                               
Insurance  (DOI), Department  of Commerce,  Community &  Economic                                                               
Development  (DCCED),   requests  $199,700  of   federal  receipt                                                               
authority in order  to receive and expend grant  funding from the                                                               
Centers for Medicare  and Medicaid Services.   This funding would                                                               
be  used  to  assess  whether  health  care  plans  were  meeting                                                               
Alaskans'  needs,  analyze  accessibility  and  affordability  of                                                               
health  care  coverage, and  conduct  an  economic and  actuarial                                                               
research  and  analysis  regarding  accessibility  to  affordable                                                               
health  care  coverage  and  to  develop  recommendations.    The                                                               
remainder  of the  grant award  will be  requested in  the FY  20                                                               
budget and no match is required.                                                                                                
                                                                                                                                
10:11:15 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked  whether there were any questions  on RPL 08-                                                               
9-0121 and there were none.  He moved to the next RPL.                                                                          
                                                                                                                                
10:11:20 AM                                                                                                                   
                                                                                                                                
MS.  RYDER  explained  that  RPL  20-9-0044,  the  Department  of                                                               
Corrections  (DOC),  requests  $73,000 of  federal  authorization                                                               
because  the federal  grant award  for the  Residential Substance                                                               
Abuse  Treatment for  the state  prisoners  program increased  to                                                               
$138,000.   The  funding  will be  allocated  to the  residential                                                               
substance abuse  treatment program housed in  the Hiland Mountain                                                               
Correctional Center  (HMCC), which is the  state's primary female                                                               
unit.     The  increase  in   funding  is  associated   with  the                                                               
requirement that  medication-assisted treatment services  are now                                                               
required to  be incorporated as part  of the spectrum of  care in                                                               
order to  continue receiving this grant  funding.  There is  a 25                                                               
percent  matching fund  requirement,  which in  essence is  about                                                               
$18,000 to $18,125, which will be absorbed by the DOC.                                                                          
                                                                                                                                
10:12:18 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked  whether there were any questions  on RPL 20-                                                               
9-0044 and there were none.  He moved to the next RPL.                                                                          
                                                                                                                                
10:12:23 AM                                                                                                                   
                                                                                                                                
MS. RYDER explained that RPL  05-9-0045, the Alaska State Council                                                               
on the Arts, requests  $385,000 of statutorily-designated program                                                               
receipt authority  to receive  funding from  new grants  from the                                                               
Margaret   A.  Cargill   Foundation  (MACF)   and  the   Rasmuson                                                               
Foundation.   These grants  will support  new arts  and education                                                               
programs and initiatives.  These  grants are expected to continue                                                               
for the next  5-10 years so a similar request  is expected in the                                                               
FY 20 budget and no match is required.                                                                                          
                                                                                                                                
CHAIR  STEDMAN asked  whether  there were  any  questions on  RPL                                                               
05-9-0045 and there were none.  He moved to the next RPL.                                                                       
                                                                                                                                
10:13:08 AM                                                                                                                   
                                                                                                                                
MS.  RYDER  explained  that  RPL  18-9-0374,  the  Department  of                                                               
Environmental  Conservation (DEC),  requests $853,800  of federal                                                               
receipt authority.   For the  past several years,  the department                                                               
has been  preserving a portion  of federal indirect  cost revenue                                                               
to  cover a  one-time  cost  of cubicle  furniture  that will  be                                                               
necessary to  move into new office  space in Juneau.   She stated                                                               
that  this is  a one-time  request  and has  no future  budgetary                                                               
impacts.                                                                                                                        
                                                                                                                                
CHAIR STEDMAN asked  whether there were any questions  on RPL 18-                                                               
9-0374 and there were none.  He moved to the next RPL.                                                                          
                                                                                                                                
10:13:44 AM                                                                                                                   
                                                                                                                                
MS. RYDER stated that RPL  09-9-0113 would provide the Department                                                               
of  Military  and  Veterans  Affairs   (DMVA)  with  $100,000  of                                                               
statutorily-designated  program  receipt  authorization  for  the                                                               
Homeland  Security  &  Emergency   Management  Division  for  two                                                               
employees   to   assist   the  State   of   California   in   the                                                               
administration   and   implementation    of   Federal   Emergency                                                               
Management  Agency  (FEMA)  funding  for the  November  fires  in                                                               
California.    The immediate  need  for  the  RPL is  just  under                                                               
$50,000;  however,   an  additional   $50,000  would   allow  for                                                               
flexibility in  responding to other  requests for  assistance and                                                               
no match is required.                                                                                                           
                                                                                                                                
10:14:26 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON objected  for the  purpose of  discussion.                                                               
He said he  was curious whether the $50,000  should be considered                                                               
and if it was justified  to consider potential future expenses in                                                               
this committee.                                                                                                                 
                                                                                                                                
10:14:47 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN  asked Ms.  Ryder to  provide clarification  on the                                                               
timing  of  the  request  relative to  the  upcoming  legislative                                                               
session.                                                                                                                        
                                                                                                                                
10:14:57 AM                                                                                                                   
                                                                                                                                
MS. RYDER answered  that the department could  request $50,000 as                                                               
a supplemental [operating] budget  request; however, it would add                                                               
to the  administrative costs.  She  stated that if the  DMVA does                                                               
not receive  $50,000 in federal  receipts, the  department cannot                                                               
expend any  more funds.   The $50,000 would  not be added  to the                                                               
base amount  but approval  would allow  the department  to expand                                                               
additional funding for this purpose if they receive it.                                                                         
                                                                                                                                
10:15:24 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON said that answered his question.                                                                          
                                                                                                                                
10:15:28 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked  whether there were any  further questions on                                                               
RPL 09-9-0113 and there were none.  He moved to the next RPL.                                                                   
                                                                                                                                
10:15:34 AM                                                                                                                   
                                                                                                                                
MS.  RYDER explained  that  in RPL  12-9-3040  the Department  of                                                               
Public  Safety  (DPS) requests  $300,000  because  the amount  of                                                               
federal  grant awards  increased to  $692,500.   She stated  that                                                               
this funding will  be used to improve the  quality and timeliness                                                               
of  forensic  science or  medical  examiner  coroner services  to                                                               
eliminate a backlog in the  analysis of forensic science evidence                                                               
and to  train, assist and  employ forensic  laboratory personnel,                                                               
as  needed.   This  morning the  DPS advised  her  that a  [Paul]                                                               
Coverdell  Forensic Sciences  Improvement  competitive grant  has                                                               
been  denied so  instead  of  needing $300,000,  the  RPL can  be                                                               
reduced to $163,400.  She advised  that no match is required, and                                                               
no new positions will be added.                                                                                                 
                                                                                                                                
10:16:27 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  ORTIZ  asked  for further  clarification  on  the                                                               
requested amount  and if  it meant the  request was  for $163,000                                                               
rather than $300,000.                                                                                                           
                                                                                                                                
MS. RYDER responded that the  division recommends that the amount                                                               
for RPL 12-9-3040 be amended to $163,400 instead of $300,000.                                                                   
                                                                                                                                
10:17:04 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN related his understanding  that the request for RPL                                                               
12-9-3040 would be for $153,000.                                                                                                
                                                                                                                                
MS. RYDER clarified  that the total amended request  would be for                                                               
$163,400.                                                                                                                       
                                                                                                                                
10:17:21 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN stated  the request for RPL 12-9-3040  would be for                                                               
$163,400.                                                                                                                       
                                                                                                                                
10:17:25 AM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  amend  RPL 12-9-3040  to  reflect  the amount  of  the                                                               
reduction to $163,400.                                                                                                          
                                                                                                                                
There  being  no  objection,  RPL   12-9-3040,  as  amended,  was                                                               
adopted.                                                                                                                        
                                                                                                                                
10:18:10 AM                                                                                                                   
                                                                                                                                
MS. RYDER  stated that in  RPL 12-9-3050 the Council  of Domestic                                                               
Violence  and   Sexual  Assault  (CDVSA)  requests   $500,000  of                                                               
additional receipt  authority as a  result of an increase  in the                                                               
federal Victim  of Crime  Acts (VOCA) federal  grant award.   She                                                               
stated  there is  no match  required and  the DPS  [Department of                                                               
Public   Safety]   will    be   requesting   additional   federal                                                               
authorization in the FY 20 budget.                                                                                              
                                                                                                                                
There being  no objection to  RPL-9-3050, the committee  moved to                                                               
the next RPL.                                                                                                                   
                                                                                                                                
10:18:46 AM                                                                                                                   
                                                                                                                                
MS.  RYDER explained  that  in RPL  25-9-8623  the Department  of                                                               
Transportation  and  Public   Facilities  (DOT&PF)  requests  $25                                                               
million in  federal capital  funding to  address damage  to major                                                               
highways, roads, bridges, and other  infrastructure caused by the                                                               
November 30, 2018 earthquake and the subsequent aftershocks.                                                                    
                                                                                                                                
10:19:33 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON  asked  to  place   a  potential  conflict  of                                                               
interest  on the  record.    She stated  that  her husband  [John                                                               
MacKinnon]  was recently  appointed by  Governor Dunleavy  as the                                                               
Commissioner of the DOT&PF.                                                                                                     
                                                                                                                                
CHAIR STEDMAN said it was duly noted.                                                                                           
                                                                                                                                
10:19:51 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked if there  were any objections to adopting RPL                                                               
25-9-8623.                                                                                                                      
                                                                                                                                
10:20:22 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   [objecting   for  the   purpose   of                                                               
discussion]  asked whether  Ms.  Ryder  could provide  background                                                               
information  on the  $25 million,  including  which agency  would                                                               
receive the  funds and whether  it was considered a  down payment                                                               
from  the federal  government  on other  funds.   He  recollected                                                               
reading in  the newspaper  that the  local school  district would                                                               
need  $25-50 million.   He  anticipated  that earthquake  funding                                                               
would be an issue during the  upcoming session, so he asked for a                                                               
greater  sense  of  what  this   represents  in  terms  of  other                                                               
potential federal funding.                                                                                                      
                                                                                                                                
10:21:10 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN  asked  Ms. Ryder  to  respond  to  Representative                                                               
Josephson's  concern  about  the  magnitude  of  the  request  as                                                               
compared  to   the  potential   magnitude  of   the  [earthquake]                                                               
destruction and  repair, in terms of  this point in time  and the                                                               
normal legislative budget cycle.                                                                                                
                                                                                                                                
MS. RYDER deferred to Rob Carpenter.                                                                                            
                                                                                                                                
10:22:14 AM                                                                                                                   
                                                                                                                                
ROB  CARPENTER,  Fiscal  Analyst, Legislative  Finance  Division,                                                               
Legislative  Agencies  and  Offices,  answered  that  the  agency                                                               
[DOT&PF] could provide  additional detail, but the  concept is to                                                               
set up a collector appropriation  to receive initial funding from                                                               
the federal  agency to perform  the initial assessment  of damage                                                               
caused by  the earthquake.   He stated that potential  exists for                                                               
future   matching  funds   which  would   be  addressed   in  the                                                               
supplemental budget  in the upcoming legislature.   He reiterated                                                               
that the  RPL was  for initial collection  of emergency  funds to                                                               
continue the process.                                                                                                           
                                                                                                                                
10:22:48 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN  advised [the public]  that the  Legislative Budget                                                               
and Audit  Committee cannot appropriate funds,  but the committee                                                               
can issue  the authority to  receive federal funding.   He stated                                                               
that  the [RPL]  request would  allow  the state  to receive  the                                                               
federal funding  to accelerate the  reconstruction of  the state.                                                               
He anticipated  that this will  be one  of the top  items Senator                                                               
von Imhof will address in the Capital Budget in minute detail.                                                                  
                                                                                                                                
10:23:21 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON,  in  response  to  Representative  Josephson,                                                               
stated  that RPL  [25-9-8623]  is  for the  DOT&PF  and does  not                                                               
extend to  the building damage  in the Anchorage  School District                                                               
(ASD).  She offered her  belief that would be something different                                                               
that   would  be   taken  up   separately.     She  related   her                                                               
understanding,  as   reported  in  the  newspapers,   Alaska  has                                                               
received an  initial $5 million  from the federal  government for                                                               
an emergency assessment  of damages caused by  the earthquake and                                                               
to  determine   the  amount  of   assistance  from   the  federal                                                               
government for federal  relief funding.  She  recollected that on                                                               
December 3,  2018, the [Alaska]  delegation performed  an on-site                                                               
review  of damage  from Houston  to  South Anchorage  and to  the                                                               
Girdwood area.   As  Mr. Carpenter  stated, DOT&PF  was available                                                               
online to answer  questions.  She indicated  that [RPL 25-9-8623]                                                               
for a $25 million appropriation is specifically for the DOT&PF.                                                                 
                                                                                                                                
10:24:28 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN anticipated  the  state would  likely need  school                                                               
construction  and   reconstruction  funding   [as  a   result  of                                                               
earthquake damage].                                                                                                             
                                                                                                                                
10:24:39 AM                                                                                                                   
                                                                                                                                
MS.  RYDER  added that  the  division  received information  from                                                               
DOT&PF that for the first 180  days after the [November 30, 2018]                                                               
earthquake,   the   reimbursement   from  the   Federal   Highway                                                               
Administration  (FHWA) is  at 100  percent so  no match  would be                                                               
required at this time.   She anticipated that some matching funds                                                               
may be required after that timeframe.                                                                                           
                                                                                                                                
10:25:07 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN  asked  whether   there  were  any  objections  to                                                               
receiving  the federal  appropriation and  there were  none.   He                                                               
stated that concluded the RPLs.                                                                                                 
                                                                                                                                
10:25:24 AM                                                                                                                   
                                                                                                                                
SENATOR  VON  IMHOF  stated  she  has  a  potential  conflict  of                                                               
interest  with  [RPL 05-9-0045]  for  Arts  in Education  private                                                               
grants.   She said she serves  as a board member  of the Rasmuson                                                               
Foundation who has contributed funding  for the Arts in Education                                                               
fund.                                                                                                                           
                                                                                                                                
10:25:54 AM                                                                                                                   
                                                                                                                                
SENATOR GIESSEL asked  for further clarification on  two RPLs not                                                               
covered:   RPL  09-2019-0068, the  Alaska Military  Youth Academy                                                               
authority  was increased;  and  RPL  20-2019-0035, Department  of                                                               
Corrections (DOC), Bureau of Justice Assistance (BHA).                                                                          
                                                                                                                                
10:26:23 AM                                                                                                                   
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
10:27:29 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked Ms. Ryder to address the two RPLs mentioned.                                                                
                                                                                                                                
10:27:31 AM                                                                                                                   
                                                                                                                                
MS.  RYDER responded  that the  Office of  Management and  Budget                                                               
(OMB)  withdrew  the  two  referenced  RPLs,  so  they  were  not                                                               
included in members'  packets.  She explained that  the RPLs were                                                               
withdrawn  at  the same  time  that  OMB  added the  $25  million                                                               
federal RPL for DOT&PF.                                                                                                         
                                                                                                                                
10:28:00 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked for a motion on the RPLs.                                                                                   
                                                                                                                                
10:28:04 AM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee (LB&A) approve the RPLs  as listed and presented to the                                                               
committee, as  follows:   02-9-0056, 08-9-0121,  20-9-0044, 05-9-                                                               
0045, 18-9-0374, 09-9-0113, 12-9-3040,  as amended [to $163,400],                                                               
12-9-3050, and 25-9-8623.                                                                                                       
                                                                                                                                
There being no objection, the RPLs were approved.                                                                               
                                                                                                                                
10:29:32 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON  asked whether the  committee needed to  have a                                                               
[roll  call] vote  to approve  the  RPLs since  some members  are                                                               
participating (via teleconference).                                                                                             
                                                                                                                                
10:29:43 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN asked to move up  the agenda to the action taken on                                                               
the RPLs.                                                                                                                       
                                                                                                                                
10:30:07 AM                                                                                                                   
                                                                                                                                
A roll  call vote was  taken.  Representatives  Seaton, Johnston,                                                               
and Josephson  (via teleconference)  and Senators  Mackinnon (via                                                               
teleconference), Bishop (via  teleconference), Giessel, and Chair                                                               
Stedman   voted  in   favor  of   the  approval   of  the   RPLs.                                                               
[Representative  Ortiz   (alternate)  and  Senator   von  Imhof's                                                               
(alternate) votes were not counted as  they were not needed for a                                                               
quorum].  Therefore, the motion passed by a vote of 7-0.                                                                        
                                                                                                                                
CHAIR  STEDMAN stated  the committee  had  approved moving  these                                                               
RPLs forward.                                                                                                                   
                                                                                                                                
^SPECIAL AUDIT REQUESTS                                                                                                         
                     SPECIAL AUDIT REQUESTS                                                                                 
                                                                                                                                
10:31:28 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN announced  the  next order  of  business would  be                                                               
approval  of  special audit  request,  Department  of Health  and                                                               
Social Services  (DHSS), Office of Children's  Services (OCS) (HB                                                               
151).                                                                                                                           
                                                                                                                                
10:32:20 AM                                                                                                                   
                                                                                                                                
SENATOR VON IMHOF  stated that the special audit  request was the                                                               
result of  HB 151,  which she and  Representative Gara  worked to                                                               
pass during  the past  legislative session.   This  special audit                                                               
request would  address the Office  of Children's  Services (OCS).                                                               
She explained  that the  bill made  several improvements  and the                                                               
audit  will  review those  changes  to  determine how  they  have                                                               
impacted how  OCS operates and  places children [in  foster care]                                                               
and how  the OCS  processes their caseload.   She  explained that                                                               
this special  audit request would  be a three-year  rolling audit                                                               
intended to  build on the  different implementations as  it moves                                                               
forward.     She   said  she   and  Representative   Gara  worked                                                               
extensively  this  fall   with  Ms.  Kris  Curtis   to  create  a                                                               
comprehensive scope for  the audit.  She stated  that this letter                                                               
was the  result of that  request [letter dated November  15, 2018                                                               
in members'  packets].  She  related that she  and Representative                                                               
Gara felt this department needs  some changes and that this audit                                                               
will assure  that the changes are  effective.  She noted  that if                                                               
the audit  needed to  be "tweaked" going  forward, [the  scope of                                                               
the audit provides the flexibility to do so].                                                                                   
                                                                                                                                
10:34:02 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE LES  GARA, Alaska  State Legislature,  stated that                                                               
he  had several  questions  on  the special  audit  request.   He                                                               
directed  attention  to  page  3  to the  last  bullet  point  on                                                               
                                                                                                                                
"permanency"  of the  November 15,2018   [memo  from Senator  von                                                               
Imhof  to Senator  Stedman, Chair,  Legislative Budget  and Audit                                                               
Committee,  Audit  Request-DHSS,  OCS,  HB 151]  [which  read  as                                                               
follows:                                                                                                                        
                                                                                                                                
   o Placement Stability:  Of all children who enter foster care                                                              
     in a 12-month period, what is the rate of placement moves                                                                  
     per day of foster care?]                                                                                                   
                                                                                                                                
REPRESENTATIVE GARA said he has  also spoken to Senator von Imhof                                                               
and  believes he  understands  her intention.    He offered  that                                                               
future  legislators  may  have unrealistic  expectations,  noting                                                               
that   members  have   all  heard   the  testimony   [before  the                                                               
legislature] related to New Jersey   model  used [in HB 151].  He                                                               
recollected that  New Jersey saw  improvements five to  six years                                                               
after  implementation of  their bill,  noting explanations  exist                                                               
for  the  lag time  and  that  things  are  not going  to  change                                                               
tomorrow.                                                                                                                       
                                                                                                                                
REPRESENTATIVE GARA  stated that  the first  three items  on that                                                               
bullet  point basically  would achieve  the  federal standard  of                                                               
placing a  child into a permanent  home within 12-24 months.   He                                                               
related  his  understanding  that  Senator von  Imhof  wanted  to                                                               
establish  a  baseline  to  allow analysis  in  future  years  on                                                               
whether the  OCS has  made improvements other  than what  OCS was                                                               
doing in  a year  from now.   However,  he cautioned  that future                                                               
legislators may  look at the  [OCS's] success in placing  a child                                                               
in  a permanent  home  within  12-24 months  as  not meeting  the                                                               
federal  standard.    He  suggested  that  if  the  goal  was  to                                                               
establish a baseline number to  change the bullet point by adding                                                               
language "so we can have a baseline for future years."                                                                          
                                                                                                                                
REPRESENTATIVE GARA  added that if  people were to  criticize the                                                               
OCS's  progress when  the figures  become available  in the  next                                                               
year or  so, he suggested  that it would  be relevant to  see how                                                               
that figure compared  to past practice.  The goal  was to achieve                                                               
improvement in the [foster care] system  and not just to meet the                                                               
federal standards.   He suggested  the goal should be  to compare                                                               
placement figures in the first  three bullet points on permanency                                                               
in the first 12 months to  how the agency performed in 2016-2017.                                                               
He commented that a year prior  to passage of HB 151 the [agency]                                                               
made major  improvements in  its Wasilla  office in  with results                                                               
starting to appear in 2018.                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA summarized his  points, which were to include                                                               
language "to  establish a baseline  for future years"  to measure                                                               
against so  future legislators do  not erroneously  conclude that                                                               
improvements had not yet been made.   In terms of the last bullet                                                               
point on  "placement stability", or  how many times  children are                                                               
bounced between foster  homes, he suggested the same  thing.  The                                                               
number would not  make any sense unless people  realize that this                                                               
was a "baseline  number.   He suggested that if  people wanted to                                                               
know whether  progress had  occurred, the  committee may  wish to                                                               
add language  to compare the figures  early in the bill  to those                                                               
in 2016-2017 to assess and determine the impact.                                                                                
                                                                                                                                
10:37:30 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARA  directed  attention to  the  fourth  bullet                                                               
point which read as follows:                                                                                                    
                                                                                                                                
   o Re-entry to Foster Care:  Of all children who enter foster                                                               
     care  in a  12-month  period and  are  discharged within  12                                                               
     months to  reunification or  guardianship, what  percent re-                                                               
     entered  foster  care within  12  months  of their  date  of                                                               
     discharge?                                                                                                                 
                                                                                                                                
REPRESENTATIVE   GARA  suggested   that  there   might  be   some                                                               
unintended consequences to this provision.                                                                                      
                                                                                                                                
10:37:47 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARA pointed  out  that if  the  bill works  that                                                               
figure might actually increase since  there are two ways to place                                                               
youth in a  permanent home.  One would be  the foster child would                                                               
go  to a  loving  adoptive  family or  guardianship,  which is  a                                                               
permanent home.   The second way would be  reunification with the                                                               
original  family.   It may  be that  caseworkers spent  more time                                                               
with the  original family  and that time  resulted in  more youth                                                               
being reunified  with their original  families.  Often  these are                                                               
families  who suffer  from long-term  alcohol or  substance-abuse                                                               
problems.   Caseworkers  work  with these  parents  in hopes  for                                                               
reunification;  however, a  number  of those  families will  fail                                                               
because  they are  battling drug  abuse and  alcoholism problems.                                                               
He acknowledged that  the success rate for drug  abuse and foster                                                               
care is  not 100 percent.   Thus, when reuniting more  youth with                                                               
their families, some of these  families will slip and these youth                                                               
will  fall  into  the  figures  of  re-entry  into  foster  care.                                                               
Although he could not be  certain, he reiterated that this figure                                                               
might  inadvertently increase.   He  asked to  flag that  for the                                                               
committee  to consider.   He  reminded  members that  in the  New                                                               
Jersey model the  figures did not improve  until the five-to-six-                                                               
year  point  after  implementation.    Although  there  could  be                                                               
improvements  to these  families  lives early  on, these  numbers                                                               
might not have dramatically changed.                                                                                            
                                                                                                                                
10:39:51 AM                                                                                                                   
                                                                                                                                
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Legislative  Agencies  and Offices,  said  that  what was  unique                                                               
about this special audit request  as Senator von Imhof mentioned,                                                               
is that the  special audit is really a request  for three audits.                                                               
She  stated  this  is  necessary because  the  bill  has  various                                                               
effective dates.   She  explained that  rather than  waiting four                                                               
years  [to  evaluate  progress] the  division  suggests  auditing                                                               
after one  year, after two  years, and  after three years.   When                                                               
one  has gone  in the  second and  third time,  the auditors  are                                                               
evaluating whether the initial findings have been addressed.                                                                    
                                                                                                                                
MS. CURTIS asked  members for guidance on  the baseline measures.                                                               
She suggested  it may  be a  good idea to  calculate those  as of                                                               
2016-2017 and  then examine them as  part of the final  audit for                                                               
comparison.   One of  the things  she heard  was sometimes  it is                                                               
difficult to  obtain measures  from the  agency, so  the division                                                               
will   be  providing   that  baseline   in  the   initial  audit,                                                               
objectively, from  the auditors.   The legislative  auditor would                                                               
then conduct  the last  audit.   She said  that if  the committee                                                               
wants  to go  back and  calculate  those for  2016, the  auditors                                                               
could do so and in 2020 to allow enough time.                                                                                   
                                                                                                                                
10:41:37 AM                                                                                                                   
                                                                                                                                
SENATOR VON  IMHOF said  that approach  sounds reasonable  and if                                                               
that was something  the auditors can do it would  meet the spirit                                                               
of what Representative  Gara was asking.  She  reiterated that to                                                               
go forward in terms of  addressing Representative Gara's concerns                                                               
the  goal is  to  look  for trends  or  specific  values such  as                                                               
whether [the  state] is  meeting or failing  to meet  the federal                                                               
guidelines.  She  asked Ms. Curtis to determine  the baseline for                                                               
the last  few years  in the initial  audit prior  to implementing                                                               
changes in  HB 151.   She personally  does not believe  the audit                                                               
must  contain specificity  such as  identifying trend  lines that                                                               
have  occurred  or determining  if  the  OCS  is above  or  below                                                               
federal  guidelines.   She considered  that to  be the  analysis,                                                               
which  is  inherent  in  an   audit.    She  further  understood,                                                               
acknowledging  she   may  be  making  an   assumption,  that  the                                                               
[committee]  does not  want ramifications  three  years from  now                                                               
from a future legislative committee  concluding that because [the                                                               
OCS] did  not meet the  guidelines that  it is necessary  to shut                                                               
down [the  agency].  She  said she does  not want that  to happen                                                               
and she does  not feel that this  is the spirit of  the intent of                                                               
this special audit.  She asked  whether Ms. Curtis thinks that it                                                               
is necessary to have that specific language in this letter.                                                                     
                                                                                                                                
10:43:14 AM                                                                                                                   
                                                                                                                                
MS.  CURTIS  responded   that  she  does  not  think   so.    She                                                               
highlighted  the language  in the  bullet states  that the  audit                                                               
will  compare [permanency]  measures to  the national  standards.                                                               
She acknowledged  that some concern was  expressed that comparing                                                               
to  national standards  may not  be what  [the committee]  really                                                               
wants  to  do.    She  asked for  direction  as  to  whether  the                                                               
committee wants  the audit  to contain  a comparison  to national                                                               
standards at  all or if the  committee wants a measure  to use to                                                               
compare future calculations to the baseline.                                                                                    
                                                                                                                                
10:43:46 AM                                                                                                                   
                                                                                                                                
SENATOR VON IMHOF said that  since the legislature has considered                                                               
New Jersey  and other  states for guidance,  which is  a national                                                               
scope, that  comparing it nationally  is fair; however,  she also                                                               
thought  it was  fair for  auditors, in  their analysis,  to make                                                               
notations of  what might  be specific to  Alaska, such  as Tribal                                                               
Compact Agreements or other considerations  that arise during the                                                               
three years of  conducting audits.  She reiterated  that yes, the                                                               
audit  should compare  measures  to national  standards, but  the                                                               
auditor's  analysis should  be  performed  using Alaska  specific                                                               
effects, as well.                                                                                                               
                                                                                                                                
10:44:31 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON,  speaking  as  past Chair  of  the  House                                                               
Health  and Social  Services Standing  Committee [HHSS],  said it                                                               
appeared that  much of the  special audit request  would transfer                                                               
the  HHSS  committee   function  to  the  Legislative Budget  and                                                               
Audit  Committee  (LB&A) as  an  audit  function.   He  said  the                                                               
committee  can  obtain  data  from the  agency  by  bringing  the                                                               
commissioner  or  OCS  staff  before  the  committee  asking  for                                                               
updates on  performance with  respect to  implementing provisions                                                               
in HB 151.  He expressed  concern that having a multi-stage audit                                                               
while  simultaneously the  OCS  is working  to  implement HB  151                                                               
would   create   conflicts,   including   time   conflicts,   and                                                               
disruptions in the  agency because the auditors  will be present.                                                               
He expressed  further concern that  the report would come  to the                                                               
LB&A  instead of  the HHSS  committee.   He  suggested that  this                                                               
seemed more  like a performance  audit, which [the  committee] no                                                               
longer conducts.   He related  his sense  that it could  be quite                                                               
disruptive  during   a  new   administration  to   implement  the                                                               
provisions of  HB 151 in  a short-timeline audit.   He reiterated                                                               
his concern that it was  mixing HSS committee functions with LB&A                                                               
functions  since   the  HHSS  Chair  could   request  and  obtain                                                               
information if  the LB&A  committee would like  to know  how many                                                               
people were hired or had other questions for the agency.                                                                        
                                                                                                                                
10:47:05 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN  asked  Ms.  Curtis  to  speak  to  the  potential                                                               
conflict with process or disruption.                                                                                            
                                                                                                                                
10:47:16 AM                                                                                                                   
                                                                                                                                
MS. CURTIS clarified  that performance reviews were  added to the                                                               
Legislative Audit  [Division's] duties  five years ago  have been                                                               
defunded.   She identified  those as  reviews the  division would                                                               
facilitate  with a  contractor to  review the  agency.   However,                                                               
those  reviews  were  not performance  audits  since  performance                                                               
audits are still requested through  this committee, which is what                                                               
this  is, she  said.   An  audit  is a  much  different level  of                                                               
assurance than a performance review by a consultant.                                                                            
                                                                                                                                
MS. CURTIS responded  that the concern an audit  would disrupt an                                                               
agency is a very valid concern  since auditors take up staff time                                                               
and it is disruptive.  She  stated that the auditors try to limit                                                               
the disruption as much as possible;  however, it is a function of                                                               
the  oversight process  of  audit.   She  questioned whether  the                                                               
committee could obtain the same  level of assurance by asking the                                                               
department  to  report  information  as compared  to  having  the                                                               
division  prepare it.    She explained  that  an auditor  reviews                                                               
information including  testing and  files whereas  the department                                                               
could  likely provide  anecdotal feedback  on how  the department                                                               
views  its  progress,  which  is valid;  however,  it  would  not                                                               
provide  the LB&A  the  level  of assurance  that  an audit  will                                                               
provide.  She deferred to the committee to decide.                                                                              
                                                                                                                                
10:48:50 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSTON  said Ms.  Curtis "hit  on" what  she was                                                               
aiming for.   She offered her belief that  the Legislative Budget                                                               
and  Audit  Committee  (LB&A)  does  need  a  performance  audit,                                                               
especially  since HB  151 is  largely transformative  legislation                                                               
and  given that  the lead  person working  on the  legislation is                                                               
retiring.  She said  that she has done a lot  of work with social                                                               
services  agencies in  the  past.   She  has  served  on the  HSS                                                               
committee and has heard numerous  anecdotal comments; however, it                                                               
has been  very difficult to  obtain data.   She offered  her view                                                               
that the special  audit for HB 151 will foster  a better process.                                                               
She said that  good data requires a good process  and the special                                                               
audit might encourage a better  process, including digitized data                                                               
in  foster care  rather than  having repeated  re-entry into  the                                                               
system.    She  suggested  the  special  audit  will  drive  what                                                               
Representative Gara  has been  trying to  achieve.   Further, one                                                               
consideration was  that the incoming HSS  committee are currently                                                               
unknown  and this  issue  might  not be  on  their  "radar" as  a                                                               
priority; however, the LB&A has  the responsibility to keep it on                                                               
the HSS  committees' "radar."   She said she was  very supportive                                                               
of the special audit.                                                                                                           
                                                                                                                                
10:50:35 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON offered his belief  that LB&A was trying to                                                               
determine  what happens  in [the  HHSS] committee  on an  ongoing                                                               
basis,  since  the special  audit  is  a  multi-year audit.    He                                                               
suggested that  the committee might  default to LB&A  which means                                                               
that the LB&A  would not only establish the audit,  but the audit                                                               
will  be reported  back to  the LB&A  and it  would need  to take                                                               
action.   He  expressed concern  that the  ongoing rolling  audit                                                               
might be beneficial  over time; however, if the  progress was not                                                               
quantified in  the first year that  it might provide a  reason to                                                               
abandon the  program entirely.   For  example, the  program might                                                               
not  develop quickly  since staff  levels might  be insufficient,                                                               
especially  given the  new administration's  impetus to  downsize                                                               
personnel.   He reiterated his concern  that if the OCS  does not                                                               
immediately  perform   it  may   jeopardize  the  program.     He                                                               
highlighted his  concerns, conceptually,  with the  rolling audit                                                               
process since  a number  of bills  could be  handled in  this way                                                               
since members might be concerned about a program.                                                                               
                                                                                                                                
10:52:51 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  commented  on  his  perspective  after                                                               
having listened to Representative Gara  and other testifiers.  He                                                               
offered  his belief  that  the special  audit  would compare  the                                                               
baseline OCS  data with  progress over time.   He  suggested that                                                               
"in a  sense it is  trying to  compare ourselves to  our previous                                                               
selves."   In  terms of  the  national standard,  one thing  that                                                               
interested him  was that  currently no  state meets  the national                                                               
standard.    He speculated  this  might  be because  the  federal                                                               
agencies would  like states  to work  hard on  these issues.   He                                                               
reiterated that  if there  was going  to be  a comparison  to the                                                               
national standard  it was  important to  identify the  states who                                                               
met  the  standard because  none  or  very  few  states so.    He                                                               
emphasized the importance of allowing  sufficient time for HB 151                                                               
to work, noting his recollection  was that New Jersey recommended                                                               
five years for its model to have a chance to prove itself.                                                                      
                                                                                                                                
10:54:02 AM                                                                                                                   
                                                                                                                                
MS.  CURTIS pointed  out that  HB 151  included intent  language,                                                               
that Department  of Health and  Social Services (DHSS)  agrees to                                                               
cooperate  with  a  special  audit  on this  bill.    The  intent                                                               
language was inserted  in the Senate and discussed  on the floor,                                                               
she said.                                                                                                                       
                                                                                                                                
10:54:25 AM                                                                                                                   
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
10:54:32 AM                                                                                                                   
                                                                                                                                
SENATOR VON  IMHOF moved  that the  Legislative Budget  and Audit                                                               
Committee approve  the special audit  request for  the Department                                                               
of  Health  and  Social  Services (DHSS),  Office  of  Children's                                                               
Services  (OCS)  as  presented   with  an  amendment  to  include                                                               
baseline data for FY 16.                                                                                                        
                                                                                                                                
10:59:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON objected.                                                                                                 
                                                                                                                                
10:59:29 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON  offered his  belief that  he has  made his                                                               
position clear during the discussion.                                                                                           
                                                                                                                                
10:59:49 AM                                                                                                                   
                                                                                                                                
A roll call vote was  taken.  Representatives Johnston, Josephson                                                               
(via    teleconference)     and    Senators     MacKinnon    (via                                                               
teleconference), Bishop (via  teleconference), Giessel, and Chair                                                               
Stedman voted  in favor  of approving  the special  audit request                                                               
for   DHSS,  Office   of  Children's   Services,  as   presented.                                                               
Representative Seaton  voted against  it.   [Representative Ortiz                                                               
(alternate) and  Senator von Imhof's  (alternate) votes  were not                                                               
counted as  they were not needed  for a quorum].   Therefore, the                                                               
special  audit  request  for  the   DHSS,  Office  of  Children's                                                               
Services, as presented, was adopted by a vote of 6-1.                                                                           
                                                                                                                                
^EXECUTIVE SESSION                                                                                                              
                       EXECUTIVE SESSION                                                                                    
                                                                                                                              
11:01:14 AM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN announced that the  next order of business would be                                                               
executive session.                                                                                                              
                                                                                                                                
11:01:29 AM                                                                                                                   
                                                                                                                                
SENATOR GIESSEL made a motion  to move to executive session under                                                               
Uniform Rule 22  of the Alaska State Legislature  for the purpose                                                               
of  discussing confidential  audit  reports  under AS  24.20.301.                                                               
The  purpose  of  the  executive   session  is  to  consider  the                                                               
following  final   audits:     DCCED  [Department   of  Commerce,                                                               
Community  and  Economic  Development  -  Board  of  Barbers  and                                                               
Hairdressers, Board  of Dental Examiners, Board  of Nursing; DHSS                                                               
[Department of  Health and Social  Services] -  Statewide Suicide                                                               
Prevention  Council;  DNR  [Department of  Natural  Resources]  -                                                               
Matanuska Maid  Select Property Disposal; and  DOA [Department of                                                               
Administration] - Statewide Single Audit,  FY 15, Reissue; and in                                                             
addition,  the  following   preliminary  audits  [Alaska  Gasline                                                               
Development  Corporation]   AGDC -  Select Financial  Issues; and                                                             
DCCED  Big Game Commercial Services Board.                                                                                      
                                                                                                                                
SENATOR GIESSEL  asked that the  following persons remain  in the                                                               
room or  online for executive  session:  the  legislative auditor                                                               
and necessary  staff for Legislative  Audit, any  legislators not                                                               
on the committee; and staff for members of the committee.                                                                       
                                                                                                                                
11:02:20 AM                                                                                                                   
                                                                                                                                
CHAIR  STEDMAN  indicated  the   committee  will  first  consider                                                               
preliminary audits followed by final audits.                                                                                    
                                                                                                                                
[There  being no  objection, the  committee  went into  executive                                                               
session at 11:02 a.m.]                                                                                                          
                                                                                                                                
11:02:49 AM                                                                                                                   
                                                                                                                                
The committee took  an at-ease from 11:02 a.m. to  12:12 p.m. for                                                               
the purpose of an executive session.                                                                                            
                                                                                                                                
12:12:06 PM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN brought the Legislative  Budget and Audit Committee                                                               
back to order  at 12:12 p.m.   Present at the call  back to order                                                               
were   Representatives  Seaton,   Johnston,  Ortiz   (alternate),                                                               
Josephson  (via  teleconference),  and  Senators  Mackinnon  (via                                                               
teleconference),  Giessel,  von   Imhof  (alternate),  and  Chair                                                               
Stedman were present at the call to order.                                                                                      
                                                                                                                                
CHAIR  STEDMAN stated  that  the committee  had  a quorum  (three                                                               
members from  the House  and three  members of  the Senate  for a                                                               
total of six members) to  conduct business without the assistance                                                               
of the two alternates [who were present].                                                                                       
                                                                                                                                
                      FINAL AUDIT REPORTS                                                                                   
                                                                                                                                
12:13:59 PM                                                                                                                   
                                                                                                                                
[CHAIR STEDMAN  announced that the  next order of  business would                                                               
be the final audit reports.]                                                                                                    
                                                                                                                                
12:14:07 PM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee approve the  release to the public  the following final                                                               
audit  reports  for  the  Department  of  Commerce,  Community  &                                                               
Economic   Development   (DCCED):      Board   of   Barbers   and                                                               
Hairdressers, Board  of Dental Examiners,  Board of  Nursing; the                                                               
Department  of Health  and Social  Services  - Statewide  Suicide                                                               
Prevention  Council;  the  Department   of  Natural  Resources  -                                                               
Matanuska Maid  Select Property Disposal;  and the  Department of                                                               
Administration - Statewide Single Audit, FY 15, Reissue.                                                                        
                                                                                                                                
There being no objection, the final audits were released.                                                                       
                                                                                                                                
                   PRELIMINARY AUDIT REPORTS                                                                                
                                                                                                                                
12:15:00 PM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN  announced that the  final order of  business would                                                               
be preliminary audit reports.                                                                                                   
                                                                                                                                
12:15:04 PM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  approve  the  release  to  the  public  the  following                                                               
preliminary audit for the AGDC, Select Financial Issues.                                                                        
                                                                                                                                
[The committee treated this motion as withdrawn.]                                                                               
                                                                                                                                
12:15:19 PM                                                                                                                   
                                                                                                                                
SENATOR STEDMAN asked to return to  the agenda item and motion to                                                               
release the  final audit  reports in  order to  have a  roll call                                                               
vote  since  some committee  members  were  participating in  the                                                               
meeting telephonically.                                                                                                         
                                                                                                                                
12:15:47 PM                                                                                                                   
                                                                                                                                
A roll  call vote was  taken.  Representatives  Seaton, Johnston,                                                               
and  Josephson (via  teleconference) and  Senator MacKinnon  (via                                                               
teleconference),  Giessel, and  Chair Stedman  voted in  favor of                                                               
the release to  the public the following final  audit reports for                                                               
the  Department of  Commerce,  Community  & Economic  Development                                                               
(DCCED):   Board  of Barbers  and Hairdressers,  Board of  Dental                                                               
Examiners, Board of Nursing; the  Department of Health and Social                                                               
Services -  Statewide Suicide Prevention Council;  the Department                                                               
of Natural  Resources - Matanuska Maid  Select Property Disposal;                                                               
and the  Department of Administration  - Statewide  Single Audit,                                                               
FY 15,  Reissue.  [Representative  Ortiz (alternate)  and Senator                                                               
von Imhof's (alternate)  votes were not counted as  they were not                                                               
needed for a quorum].   Therefore, the final audits were released                                                               
by a vote of 6-0.                                                                                                               
                                                                                                                                
12:16:55 PM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  approve  the  release  to  the  public  the  following                                                               
preliminary audit for the AGDC - Select Financial Issues.                                                                       
                                                                                                                                
12:17:21 PM                                                                                                                   
                                                                                                                                
A roll  call vote was  taken.  Representatives  Seaton, Johnston,                                                               
and  Josephson (via  teleconference) and  Senator MacKinnon  (via                                                               
teleconference),  Giessel, and  Chair Stedman  voted in  favor of                                                               
the release to the public  the following preliminary audit report                                                               
for  the  AGDC  -  Select   Financial  Issues.    Therefore,  the                                                               
preliminary  audit for  the AGDC    Select  Financial Issues  was                                                               
released by a vote of 6-0.                                                                                                      
                                                                                                                                
12:18:16 PM                                                                                                                   
                                                                                                                                
SENATOR  GIESSEL  moved that  the  Legislative  Budget and  Audit                                                               
Committee  approve  the  release  to  the  public  the  following                                                               
preliminary  audit for  the Department  of Commerce,  Community &                                                               
Economic  Development  (DCCED)    Big  Game  Commercial  Services                                                               
Board (BGCSB).                                                                                                                  
                                                                                                                                
12:18:30 PM                                                                                                                   
                                                                                                                                
A roll  call vote was  taken.  Representatives  Seaton, Johnston,                                                               
and  Josephson (via  teleconference) and  Senator MacKinnon  (via                                                               
teleconference),  Giessel, and  Chair Stedman  voted in  favor of                                                               
the release to the public  the following preliminary audit report                                                               
for the Department of Commerce,  Community & Economic Development                                                               
  Big  Game Commercial  Services Board  (BGCSB).   Therefore, the                                                               
preliminary  audit for  the Department  of Commerce,  Community &                                                               
Economic  Development     Big   Game  Commercial  Services  Board                                                               
(BGCSB) released by a vote of 6-0.                                                                                              
                                                                                                                                
12:19:15 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked to  reconsider an  amendment made                                                               
on the audit for the Office of Children's Services.                                                                             
                                                                                                                                
12:19:41 PM                                                                                                                   
                                                                                                                                
CHAIR    STEDMAN   asked    for   further    clarification   that                                                               
Representative  Josephson wanted  the  committee  to [rescind]  a                                                               
previous action taken.                                                                                                          
                                                                                                                                
12:19:52 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked to  make a "friendly amendment" to                                                               
an amendment that was previously adopted.                                                                                       
                                                                                                                                
12:20:00 PM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 12:20 p.m. to 12:22 p.m.                                                                     
                                                                                                                                
12:22:46 PM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN announced  that the committee would not  go back up                                                               
the  agenda  to  rescind  its   action;  however,  the  committee                                                               
acknowledged and recognized the request.                                                                                        
                                                                                                                                
12:23:05 PM                                                                                                                   
                                                                                                                                
SENATOR  VON IMHOF  explained that  the committee  had previously                                                               
discussed  using  FY16 to  provide  a  baseline  for the  HB  151                                                               
special audit.   She said that after hearing  the discussions she                                                               
would like to use FY18 as the baseline [for OCS].                                                                               
                                                                                                                                
12:23:28 PM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN  agreed to  request the DHSS  to move  forward with                                                               
that and  if there  was a need  for a formal  amendment to  do so                                                               
that an amendment could be made at the next LB&A meeting.                                                                       
                                                                                                                                
12:23:44 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON said  that he had no  objection to changing                                                               
the baseline date [to FY18.]                                                                                                    
                                                                                                                                
12:24:00 PM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN  asked Representative Josephson whether  this would                                                               
address his concern.                                                                                                            
                                                                                                                                
12:24:01 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered that he believed that it did.                                                                 
                                                                                                                                
12:24:08 PM                                                                                                                   
                                                                                                                                
CHAIR STEDMAN approved changing [the baseline year to FY18].  He                                                                
said the Legislative Budget and Audit Committee would meet                                                                      
before the next legislative session.                                                                                            
                                                                                                                                
12:24:51 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the                                                                       
Legislative Budget and Audit meeting was adjourned at 12:24 p.m.                                                                

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