Legislature(2013 - 2014)ANCH LIO Rm 220
08/22/2013 01:30 PM Joint LEGISLATIVE BUDGET & AUDIT
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| Audio | Topic |
|---|---|
| Start | |
| Approval of Minutes | |
| Revised Program - Legislative (rpls) | |
| Executive Session | |
| Release of Audits | |
| Other Committee Business | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
Anchorage, Alaska
August 22, 2013
1:32 p.m.
MEMBERS PRESENT
Senator Anna Fairclough, Chair
Representative Mike Hawker, Vice Chair
Senator Kevin Meyer (via teleconference)
Senator Click Bishop
Senator Cathy Giessel
Representative Alan Austerman
Representative Bob Herron
Representative Andy Josephson
Senator Mike Dunleavy (alternate)
Representative Scott Kawasaki (alternate) (via teleconference)
MEMBERS ABSENT
Senator Donald Olson
Representative Kurt Olson
Representative Bill Stoltze (alternate)
COMMITTEE CALENDAR
APPROVAL OF MINUTES
REVISED PROGRAM - LEGISLATIVE (RPLs)
EXECUTIVE SESSION
RELEASE OF AUDITS
OTHER COMMITTEE BUSINESS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DAVID TEAL, Legislative Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information regarding RPL 05-04-
0012 and RPL 09-4-0020.
SUSAN COLLIGAN, Director
Administrative Services Division
Department of Military & Veterans' Affairs (DMVA)
Fort Richardson, Alaska
POSITION STATEMENT: Responded to a question during discussion
of RPL 09-4-0020.
KRISTIN CURTIS
Legislative Auditor
Division of Legislative Audit
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information regarding the
performance reviews of state departments as required by HB 30.
ACTION NARRATIVE
1:32:49 PM
CHAIR ANNA FAIRCLOUGH called the Legislative Budget and Audit
Committee meeting to order at 1:32 p.m. Present at the call to
order were Senators Fairclough, Meyer (via teleconference),
Bishop, and Giessel, and Representatives Austerman, Herron,
Josephson, Kawasaki (alternate) (via teleconference), and
Hawker. Senator Dunleavy (alternate) arrived as the meeting was
in progress.
^Approval of Minutes
Approval of Minutes
1:34:22 PM
CHAIR FAIRCLOUGH referred to the first order of business, that
being the approval of the minutes.
1:34:27 PM
REPRESENTATIVE HAWKER made a motion to approve the minutes of
April 6, 2013.
CHAIR FAIRCLOUGH objected, and noted that those minutes should
be corrected throughout with regard to Representative Hawker's
title. She asked, therefore, that those minutes be so
corrected, and received confirmation that they would be.
1:35:30 PM
CHAIR FAIRCLOUGH then ascertained that there were no other
objections, and announced that the minutes from the meeting of
April 6, 2013, were approved.
^Revised Program - Legislative (RPLs)
Revised Program - Legislative (RPLs)
1:35:36 PM
CHAIR FAIRCLOUGH announced that the next order of business would
be consideration of the Revised Program - Legislative (RPLs).
1:35:45 PM
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, directed attention to RPL
05-04-0012, Department of Education and Early Development,
Harper Arts Touring Program and Youth Cultural Heritage Program.
He explained that the Alaska State Council on the Arts (ASCA)
and the Department of Education and Early Development (EED) are
requesting the authority to receive and spend an additional
$160,000 in statutory designated program receipts from the
Rasmuson Foundation in order to continue the administration of
the Harper Arts Touring Program and begin a new program, the
Youth Cultural Heritage Program. Two previously-approved RPLs
addressing this same purpose are included in members' packets,
and if the current request is approved, the funding for the two
programs would be increased from $220,000 to $380,000 in 2014.
There would be no general fund (GF) match required, there would
be no new positions, and there are no technical problems with
the RPL. In response to a question, he indicated that no
matching funds would be required.
1:37:42 PM
REPRESENTATIVE HAWKER made a motion to approve RPL 05-04-0012.
There being no objection, RPL 05-04-0012 was approved.
1:38:18 PM
MR. TEAL then referred to RPL 09-4-0020, Department of Military
& Veterans' Affairs, National Guard Counterdrug Support, and
explained that the Department of Military & Veterans' Affairs
(DMVA) is requesting the authority to receive $150,000 in
[additional] federal receipts - related to a fiscal year 2013
(FY 13) capital project - for the DMVA's National Guard
Counterdrug Support program. The federal government seizes and
sells assets from drug traffickers and the proceeds are shared
with organizations participating in the U.S. Department of
Justice's (DOJ's) Asset Forfeiture Program, organizations such
as Alaska's DMVA. This funding supports law enforcement
agencies in drug enforcement operations, training drug
enforcement officers, and providing community-based drug-
awareness programs. There are no technical problems with the
RPL.
1:39:32 PM
REPRESENTATIVE HAWKER questioned whether approving the RPL would
result in [a violation] of the federal Posse Comitatus Act
(PCA). He related that the use of U.S. military forces to
enforce civil law is generally not an allowable activity.
MR. TEAL relayed that there has been a capital project for such
purposes for a number of years, generally in the amount of
$100,000 per year. Again, such funding is used in part for
training drug enforcement officers, and providing community-
based drug-awareness programs.
1:41:26 PM
SUSAN COLLIGAN, Director, Administrative Services Division,
Department of Military & Veterans' Affairs (DMVA), added that as
far as she is aware, there would be no such problems with
approving the RPL, but she would research the issue further for
the committee. The DMVA has been participating in the DOJ's
Asset Forfeiture Program since 1999, and the funding has been
used for educational programs within the schools, and for
providing support to law enforcement agencies.
REPRESENTATIVE HAWKER indicated that his concern was satisfied.
1:42:45 PM
REPRESENTATIVE HAWKER made a motion to approve RPL 09-4-0020.
There being no objection, RPL 09-4-0020 was approved.
^Executive Session
Executive Session
1:43:14 PM
CHAIR FAIRCLOUGH announced that the committee would next go into
executive session.
REPRESENTATIVE HAWKER made a motion to move to executive session
under Uniform Rule 22 for the purpose of discussing confidential
audit reports under AS 24.20.301. There being no objection, the
committee went into executive session at 1:44 p.m.
3:30:16 PM
CHAIR FAIRCLOUGH called the Legislative Budget and Audit
Committee back to order at 3:29 p.m. Present at the call back
to order were Senators Fairclough, Bishop, Giessel, and Dunleavy
(alternate), and Representatives Austerman, Herron, Josephson,
and Kawasaki (alternate) (via teleconference).
^Release of Audits
Release of Audits
3:30:30 PM
SENATOR GIESSEL made a motion for the final audit report of the
State of Alaska, single audit for the fiscal year ended June 30,
2012, to be re-released to the public. There being no
objection, it was so ordered.
3:30:56 PM
SENATOR GIESSEL made a motion for the following preliminary
audits to be released to the appropriate agency for response:
Department of Commerce, Community & Economic Development -
Regulatory Commission of Alaska, sunset review; Department of
Commerce, Community & Economic Development - Board of
Chiropractic Examiners, sunset review; Department of Commerce,
Community & Economic Development - Board of Marital and Family
Therapy, sunset review; Department of Commerce, Community &
Economic Development - Board of Examiners in Optometry, sunset
review; Department of Commerce, Community & Economic Development
- State Physical Therapy and Occupational Therapy Board, sunset
review; Department of Commerce, Community & Economic Development
- Board of Certified Real Estate Appraisers, sunset review;
Department of Public Safety - Council on Domestic Violence and
Sexual Assault, sunset review; Department of Health and Social
Services - Alaska Health Care Commission, sunset review; and
Department of Natural Resources - Agriculture Revolving Loan
Fund, select issues. There being no objection, the
aforementioned preliminary audits were released to the
appropriate agency for response.
^Other Committee Business
Other Committee Business
3:31:59 PM
CHAIR FAIRCLOUGH relayed that the first issue to be addressed
under other committee business relates to a previous request for
a special audit of the Alaska Regional Development Organizations
(ARDORs) program.
3:32:13 PM
KRISTIN CURTIS, Legislative Auditor, Division of Legislative
Audit, Alaska State Legislature, explained that an audit request
for the ARDORs program was approved at an earlier meeting but
the ARDOR program was not extended and thus no longer exists.
At issue, therefore, is whether the committee wishes to
terminate that particular audit request.
CHAIR FAIRCLOUGH offered her understanding that the audit's
requester has indicated she would be amenable to whatever the
committee decided.
3:33:01 PM
REPRESENTATIVE AUSTERMAN inquired as to when a report would be
available were the audit to proceed.
MS. CURTIS reminded the committee that the intent of the audit
was to review the program. Therefore, the audit would be
started next year and with something available for the session
after that. She recalled that the thought had been to provide a
three-year extension, which would be enough time to consider the
audit results. Since there is no program to audit, Ms. Curtis
was unsure as to whether the division could perform an audit as
originally envisioned.
REPRESENTATIVE AUSTERMAN pointed out, however, that if the old
program was audited, then there would be something to audit. He
related his understanding that there will be efforts to
reinstate the program, and therefore the information from an
audit of the old ARDOR program would be good to have in January.
MS. CURTIS acknowledged that the old program could be reviewed.
Since there was much testimony, the concerns could be
identified, including the charge that some agencies were more
productive than others in the type of information being used to
award a grant. The audit, however, wouldn't be available during
the next session but rather the session after that.
3:35:07 PM
REPRESENTATIVE HERRON questioned why the committee doesn't
suspend the request for now and then see what happens in the
next session.
MS. CURTIS characterized Representative Herron's suggestion as
reasonable, particularly since terminating an audit request is
unusual.
CHAIR FAIRCLOUGH suggested that it would also be reasonable to
withdraw what is before the committee today so that the
committee knows what is out there, unless there is a desire to
instead review the situation retrospectively. To review the
situation retrospectively would be an amendment to the current
request, she noted.
3:35:55 PM
REPRESENTATIVE JOSEPHSON asked whether an audit could be
completed by January 2015 if the ARDORs were reinstated. He,
too, noted that he has heard anecdotally of interest in
reinstating the ARDORs. If the ARDORs aren't funded until July
2014, at the earliest, then there wouldn't have been too much
time wasted.
MS. CURTIS said that if the ARDORs are funded and begin to
operate in July, the situation would be the same as it is now in
that it would really be a retrospective review of the
organization. The division wouldn't be able to evaluate the
results of any new change. She acknowledged, however, after a
look back there could be a determination as to whether there
were any new changes made to the program and whether they were
effective.
3:37:35 PM
REPRESENTATIVE HERRON opined that the chance of ARDORs returning
is very good, and therefore he requested suspending the request
until further notice.
3:38:14 PM
CHAIR FAIRCLOUGH related her understanding that some ARDORs have
more funding resources from entities outside of the state, and
thus there will be ARDORs that struggle without the state.
Chair Fairclough noted that folks were nodding in agreement.
REPRESENTATIVE JOSEPHSON relayed that the Alaska Economic
Development Corporation (AEDC) is one such ARDOR.
3:39:06 PM
CHAIR FAIRCLOUGH related her understanding that the committee
wishes to keep Ms. Curtis on task with regard to being able to
provide the committee with information in the future.
Therefore, she inquired as to whether Ms. Curtis could offer any
language to modify the audit request in order to compare the
various ARDORs.
MS. CURTIS relayed that the division could change the language
of the audit request such that it looks more retrospectively.
This audit isn't going to be started for six to eight months,
which is quite a bit of time during which something could
happen. At the time the audit request is to be started, the
language can again be reviewed to determine how to proceed. In
fact, she suggested that rather than making changes now, the
changes could be made closer to the start date of the audit.
3:40:56 PM
CHAIR FAIRCLOUGH mentioned that the committee will have a
meeting in October, and thus the committee could work with the
original audit requester between now and October. To that end,
the committee agreed to consider the issue in October, she
announced.
3:41:43 PM
CHAIR FAIRCLOUGH relayed that the second issue to be addressed
under other committee business relates to subcommittee
assignments.
The committee took a brief at-ease.
[Contains discussion of HB 30.]
3:42:30 PM
CHAIR FAIRCLOUGH turned the committee's attention to the
Subcommittee on Performance Review, which is necessary due to
the work the Legislative Budget and Audit Committee was tasked
with as a result of HB 30. She inquired as to what the
subcommittee might do.
3:43:02 PM
MS. CURTIS explained that HB 30 requires performance reviews of
every state department over a 10-year span of time. The first
performance review is the Department of Corrections (DOC) and
it's already behind schedule. The Subcommittee on Performance
Review is tasked with approving the scope of the review, which
must occur prior to a request for proposals (RFP) for experts to
lead the review team. Therefore, some form of structure is
necessary in order to review the proposed scope, which will be
the main purpose of the subcommittee. Also, the Legislative
Budget and Audit Committee handbook must be amended in order to
establish formal procedures related to how to conduct these
reviews, including the report process. Currently, the division
is in the process of drafting - with the assistance of the prior
legislative auditor - the formal procedures for HB 30. Over the
next month, she explained, that the draft scope and procedures
need to be reviewed in order to take them up at the next meeting
in October. Upon completion of the aforementioned, the division
hopes to put out an RFP enabling the review team to be in place
and working by the beginning of the next year. She explained
that [the subcommittee] needs to have its reports drafted by
September and released in December since the reports have to be
provided to the chairs of the House and Senate Finance
Committees a week or two prior to the beginning of session. The
hope is to establish a process by which the division can perform
the work, which is all new work, and start earlier for the next
department.
3:45:38 PM
REPRESENTATIVE AUSTERMAN inquired as to how Ms. Curtis
prioritizes the audits. He further inquired as to whether [the
division] is mandated by regulation or statute.
MS. CURTIS related her approach that audits and HB 30 are
separate and different matters because HB 30 reviews aren't
audits, aren't connected to standards, and won't use auditing
staff. The division has hired an individual who will lead this
process and with whom Ms. Curtis will work to draft the scope.
With regard to prioritizing, Ms. Curtis pointed out that the
statue drives and guides all of the division's work. On the
audit side, the Comprehensive Annual Financial Report (CAFR)
that needs to be audited with an opinion out by December 15.
Therefore, the CAFR is the priority. She informed the committee
that there is a federal requirement for a single audit by the
end of March and then the sunset audits are statutorily required
to be complete. When the division has resources it performs
special audit requests, which she characterized as the lowest on
the priority list. She pointed out that HB 30 is statutorily
driven in terms of the timeline.
REPRESENTATIVE AUSTERMAN recalled a presentation by New Mexico
regarding its audit system at the recent Council of State
Governments (CSG). The New Mexico [audit system] focused more
on the savings in dollars for the state. He expressed interest
in having such a conversation at the upcoming October meeting.
Representative Austerman expressed his concern with underfunding
the Division of Audit because of the requirements in place.
3:49:35 PM
CHAIR FAIRCLOUGH appointed the following members to the
Subcommittee on Performance Review: Senator Fairclough, Senator
Bishop, Representative Hawker, Representative Herron, and
Representative Kawasaki. Upon a poll she determined the
willingness of the appointed members to the subcommittee in
attendance, and noted she had also spoken with Representative
Hawker who is willing to serve as well. She then informed the
committee that the release of documents for review will occur at
the October meeting. There was then discussion regarding the
date of the next meeting.
3:52:25 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
3:52 p.m.
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