Legislature(2021 - 2022)SENATE FINANCE 532

04/30/2021 07:00 AM House LEGISLATIVE BUDGET & AUDIT

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Audio Topic
07:02:19 AM Start
07:02:59 AM Approval of Minutes
07:03:36 AM Oil & Gas Consultants Contract Amendment
07:05:51 AM Executive Session
07:51:02 AM Legislative Audit It Audit Procurement
07:53:06 AM Medical Board Audit Recommendations
07:57:20 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Rescheduled from 04/28/21 --
-- Teleconference <Listen Only> --
+ Oil & Gas Consultants Contract Amendments TELECONFERENCED
+ Legislative Audit IT Audit Procurement TELECONFERENCED
Executive Session
a. Preliminary Audit: Statewide Single Audit
+ Other Committee Business TELECONFERENCED
a. Medical Board Audit Recommendations
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                         April 30, 2021                                                                                         
                           7:02 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Natasha von Imhof, Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Lora Reinbold                                                                                                           
Senator Click Bishop (alternate)                                                                                                
Representative Chris Tuck, Vice Chair                                                                                           
Representative Andy Josephson                                                                                                   
Representative Neal Foster                                                                                                      
Representative James Kaufman                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Bert Stedman                                                                                                            
Senator Lyman Hoffman                                                                                                           
Representative Ivy Spohnholz                                                                                                    
Representative Dan Ortiz (alternate)                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF MINUTES                                                                                                             
OIL & GAS CONSULTANTS CONTRACT AMENDMENT                                                                                        
EXECUTIVE SESSION                                                                                                               
LEGISLATIVE AUDIT IT AUDIT PROCUREMENT                                                                                          
MEDICAL BOARD AUDIT RECOMMENDATIONS                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KRIS CURTIS, State Auditor                                                                                                      
Legislative Audit Division                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information regarding an IT audit                                                               
RFP and preliminary report statewide single audit.                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
7:02:19 AM                                                                                                                    
                                                                                                                                
CHAIR NATASHA VON  IMHOF called the Legislative  Budget and Audit                                                             
Committee meeting  to order at  7:02 a.m.   Representatives Tuck,                                                               
Kaufman, Josephson (via teleconference),  and Foster and Senators                                                               
Micciche, Bishop,  Reinbold, and  von Imhof  were present  at the                                                               
call to order.                                                                                                                  
                                                                                                                                
^APPROVAL OF MINUTES                                                                                                            
                      APPROVAL OF MINUTES                                                                                   
                                                                                                                              
7:02:59 AM                                                                                                                    
                                                                                                                                
CHAIR VON IMHOF announced that  the first order of business would                                                               
be Approval of Minutes.                                                                                                         
                                                                                                                                
7:03:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  moved that the Legislative  Budget and Audit                                                               
Committee  approve   the  minutes  of  the   2/24/21  meeting  as                                                               
presented.  There being no objection, it was so ordered.                                                                        
                                                                                                                                
^OIL & GAS CONSULTANTS CONTRACT AMENDMENT                                                                                       
            OIL & GAS CONSULTANTS CONTRACT AMENDMENT                                                                        
                                                                                                                              
7:03:36 AM                                                                                                                    
                                                                                                                                
CHAIR VON IMHOF  announced that the next order  of business would                                                               
be the Oil & Gas Consultants Contract Amendment.                                                                                
                                                                                                                                
CHAIR VON  IMHOF reviewed that  the Legislative Budget  and Audit                                                               
Committee currently  has two consultants  on contract  to provide                                                               
information  on  oil and  gas  fiscal  systems.   Both  contracts                                                               
terminate  June  30,  2021.    She  said  IN3NERGY,  with  [Rich]                                                               
Ruggiero,  has  been  providing  services  since  2017,  and  Mr.                                                               
Ruggiero has declined to extend  the contract.  She said Gaffney,                                                               
Cline, & Associates ("GaffneyCline")  has been providing services                                                               
since  2017,  and there  have  been  three amendments  that  have                                                               
extended and  increased the  amount of  the contract  to $950,000                                                               
total,  with  approximately  $610,000  remaining  in  unobligated                                                               
funds.   She related that  GaffneyCline has agreed to  extend its                                                               
contract.                                                                                                                       
                                                                                                                                
CHAIR VON IMHOF  highlighted that GaffneyCline is  paid only when                                                               
its  services are  utilized.   She  indicated the  last time  the                                                               
company was utilized was with respect  to a ballot measure on oil                                                               
and  gas  contracts.   She  advised  that GaffneyCline  would  be                                                               
helpful to the House and  Senate Finance Committees and the House                                                               
and Senate  Resources Standing Committees  in looking at  oil and                                                               
gas taxes.   She said GaffneyCline  has a good model  set up, has                                                               
been  working   with  [the  legislature]   for  years,   and  she                                                               
recommended  the Legislative  Budget and  Audit Committee  extend                                                               
the  company's contract.   She  opined  it is  important to  have                                                               
GaffneyCline standing by to assist the legislature.                                                                             
                                                                                                                                
7:05:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  moved that the Legislative  Budget and Audit                                                               
Committee authorize  the chair, as procurement  officer, to amend                                                               
the  contract with  Gaffney, Cline  & Associates,  to extend  the                                                               
term  of  the  contract  to  June  30,  2023.    There  being  no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
^EXECUTIVE SESSION                                                                                                              
                       EXECUTIVE SESSION                                                                                    
                                                                                                                                
7:05:51 AM                                                                                                                    
                                                                                                                                
CHAIR VON IMHOF  announced that the next order  of business would                                                               
be an  Executive Session to  address a preliminary report  on the                                                               
statewide single audit.                                                                                                         
                                                                                                                                
7:06:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  moved that the Legislative  Budget and Audit                                                               
Committee go into executive session  under Uniform Rule 22(b)(3),                                                               
for discussion  of matters that  may, by  law, be required  to be                                                               
confidential.  He asked that  the following persons remain in the                                                               
room or online:  the  legislative auditor and necessary staff for                                                               
the auditor, representatives for  Legislative Legal Services, any                                                               
legislators not  on the committee,  and staff to  legislators who                                                               
are  members of  the committee.   There  being no  objection, the                                                               
committee went into executive session.                                                                                          
                                                                                                                                
7:06:39 AM                                                                                                                    
                                                                                                                                
The committee  took an at-ease  from 7:06  a.m. to 7:50  a.m. for                                                               
the purpose of executive session.                                                                                               
                                                                                                                                
7:50:40 AM                                                                                                                    
                                                                                                                                
CHAIR  VON   IMHOF  called  the  Legislative   Budget  and  Audit                                                               
Committee back  to order at 7:50  a.m.  Present at  the call back                                                               
to  order  were  Representatives   Kaufman,  and  Josephson  (via                                                               
teleconference), Foster, and Tuck  and Senators Micciche, Bishop,                                                               
Reinbold, and von Imhof.                                                                                                        
                                                                                                                                
^LEGISLATIVE AUDIT IT AUDIT PROCUREMENT                                                                                         
             LEGISLATIVE AUDIT IT AUDIT PROCUREMENT                                                                         
                                                                                                                              
7:51:02 AM                                                                                                                    
                                                                                                                                
CHAIR VON IMHOF  announced that the next order  of business would                                                               
be the Legislative Audit and IT Audit Procurement.                                                                              
                                                                                                                                
CHAIR  VON IMHOF  explained that  during  executive session,  the                                                               
Legislative   Budget   and    Audit   Committee   had   discussed                                                               
confidential matters  related to the information  technology (IT)                                                               
audit  request  for proposal  (RFP)  and  the preliminary  report                                                               
statewide  single  audit.     She  asked  Kris   Curtis  for  any                                                               
information that could be shared publicly.                                                                                      
                                                                                                                                
7:51:19 AM                                                                                                                    
                                                                                                                                
KRIS CURTIS, State Auditor, Legislative  Audit Division, said she                                                               
is asking for  authority to award a contract for  an IT review of                                                               
ARIES, the  system used  by the Department  of Health  and Social                                                               
Services   to  determine   eligibility  for   Medicaid  and   the                                                               
Children's Health Insurance Program (CHIP).  She continued:                                                                     
                                                                                                                                
     This  is needed  in support  of our  federal compliance                                                                    
     opinion regarding  the Medicaid and CHIP  programs.  We                                                                    
     did have  this conducted  a few years  ago, and  now we                                                                    
     need  to  do  an  update.     ...  We  have  an  active                                                                    
     procurement,  which  we  hope  to issue  a  notice  and                                                                    
     intent [to award] today after this meeting.                                                                                
                                                                                                                                
7:52:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  moved that the Legislative  Budget and Audit                                                               
Committee authorize  the legislative auditor to  award a contract                                                               
not to exceed  $60,000 to the winning bidder of  RFP 21-33-01: an                                                               
examination of ARIES information  technology general controls and                                                               
application  controls.   There  being  no  objection, it  was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
7:52:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  moved to  release the  following preliminary                                                               
audit to the  agencies for response:  the  statewide single audit                                                               
from the  fiscal year that ended  June 30, 2020.   There being no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
^MEDICAL BOARD AUDIT RECOMMENDATIONS                                                                                            
              MEDICAL BOARD AUDIT RECOMMENDATIONS                                                                           
                                                                                                                              
7:53:06 AM                                                                                                                    
                                                                                                                                
CHAIR VON IMHOF announced that  the final order of business would                                                               
be Medical Board Audit Recommendations.                                                                                         
                                                                                                                                
7:53:16 AM                                                                                                                    
                                                                                                                                
MS.  CURTIS noted  that she  had sent  a memorandum  to committee                                                               
members the prior week, dated  April 21, 2021, which provided the                                                               
status  of  Medical  Board sunset  audit  recommendations.    She                                                               
explained that when  the Medical Board was extended  last year, a                                                               
provision was included in the  bill to have the Legislative Audit                                                               
Division  follow up  on the  sunset audit  recommendations within                                                               
one year.   She directed attention  to page 2 of  the memorandum,                                                               
to the first item, which  was a recommendation regarding adopting                                                               
regulations  to   guide  the  process  for   registering  in  the                                                               
controlled  substance  prescription  database;  regulations  were                                                               
adopted for that, effective March 2021.                                                                                         
                                                                                                                                
MS. CURTIS  then pointed to  the third item  on the last  page of                                                               
the memorandum,  which was a recommendation  regarding procedures                                                               
to  ensure that  licensees  with  a DEA  number  register with  a                                                               
control substance prescription  database; this recommendation was                                                               
not fully  resolved.   She stated  that no  progress was  made in                                                               
drafting procedures  until the auditors  asked about  the status;                                                               
those procedures  were drafted at  that point and  were effective                                                               
March  2021.   She  said the  division also  found  that not  all                                                               
application  forms had  been updated  to  include the  controlled                                                               
substances prescription database  requirements on the application                                                               
forms.    As  of  February  2021, the  compliance  rate  for  the                                                               
licensees  was 66  percent; more  progress  needs to  be made  on                                                               
that.                                                                                                                           
                                                                                                                                
MS.   CURTIS   directed   attention   to  the   third   item,   a                                                               
recommendation  establishing   and  implementing   procedures  to                                                               
ensure  board disciplinary  actions were  reported in  accordance                                                               
with state law, and she said this issue has been resolved.                                                                      
                                                                                                                                
7:55:10 AM                                                                                                                    
                                                                                                                                
CHAIR VON  IMHOF thanked  Ms. Curtis  and said  this issue  is an                                                               
important one in terms of tracking opioid abuse in Alaska.                                                                      
                                                                                                                                
7:55:26 AM                                                                                                                    
                                                                                                                                
MS. CURTIS added  that the division is conducting  a sunset audit                                                               
of the  Board of Pharmacy, as  well as "doing a  deeper dive into                                                               
compliance   across   all   occupations  with   that   particular                                                               
database."   In response to  Chair von Imhof, she  confirmed that                                                               
that information  would appear before the  Legislative Budget and                                                               
Audit Committee in the next 12 months.                                                                                          
                                                                                                                                
7:55:43 AM                                                                                                                    
                                                                                                                                
SENATOR  REINBOLD, regarding  disciplinary action,  asked whether                                                               
it pertained to the database or included other issues, as well.                                                                 
                                                                                                                                
7:55:57 AM                                                                                                                    
                                                                                                                                
MS. CURTIS explained  that with the Medical  Board, certain types                                                               
of violations must be reported to  a national database.  She said                                                               
there were certain fines [the  Medical Board] had not realized it                                                               
had to  report on  the national  level, but the  board is  now in                                                               
full compliance.                                                                                                                
                                                                                                                                
SENATOR  REINBOLD  asked, "So,  this  only  has  to do  with  the                                                               
reporting of the database, nothing else.  Is that correct?"                                                                     
                                                                                                                                
MS. CURTIS replied:                                                                                                             
                                                                                                                                
     It  has  nothing to  do  with  the database,  actually.                                                                    
     It's  just ...  regular,  typical  investigations of  a                                                                    
     licensee  when they  find that  some type  of violation                                                                    
     has  occurred, and  they're required  to report  those.                                                                    
     Even if it's ... a fine,  or whatever type of action is                                                                    
     taken,  they   have  to  report  that   to  a  national                                                                    
     database.                                                                                                                  
                                                                                                                                
7:57:20 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
[7:57] a.m.                                                                                                                     

Document Name Date/Time Subjects
LBAC Agenda 2021.04.30.pdf JBUD 4/30/2021 7:00:00 AM
III. Oil and Gas Consultant Contract Amendments.pdf JBUD 4/30/2021 7:00:00 AM
IV. IT Audit Procurement.pdf JBUD 4/30/2021 7:00:00 AM
VIa. Medical Board Audit Recommendations.PDF JBUD 4/30/2021 7:00:00 AM