Legislature(2013 - 2014)HOUSE FINANCE 519
01/18/2013 08:00 AM Senate LEGISLATIVE BUDGET & AUDIT
| Audio | Topic |
|---|---|
| Start | |
| Election of Chairman | |
| Election of Vice Chairman | |
| Legislative Finance | |
| Overview of the Audit Process | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
January 18, 2013
8:02 a.m.
MEMBERS PRESENT
Senator Anna Fairclough, Chair
Senator Kevin Meyer
Senator Click Bishop
Senator Cathy Giessel
Senator Donald Olson
Representative Mike Hawker, Vice Chair
Representative Alan Austerman
Representative Bob Herron
Representative Andrew Josephson
Representative Scott Kawasaki (alternate)
MEMBERS ABSENT
Representative Kurt Olson
Representative Bill Stoltze (alternate)
Senator Mike Dunleavy (alternate)
COMMITTEE CALENDAR
ELECTION OF CHAIRMAN
ELECTION OF VICE CHAIRMAN
LEGISLATIVE FINANCE
OVERVIEW OF THE AUDIT PROCESS
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 to the Joint Committee
on Legislative Budget and Audit.
AMANDA RYDER, Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information to the Joint Committee
on Legislative Budget and Audit.
ROB CARPENTER, Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information to the Joint Committee
on Legislative Budget and Audit.
LACEY SANDERS, Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information to the Joint Committee
on Legislative Budget and Audit.
ILDIKO NYLEN, Administrative Officer
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information to the Joint Committee
on Legislative Budget and Audit.
KELLY CUNNINGHAM, Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information to the Joint Committee
on Legislative Budget and Audit.
DANITH WATTS, Fiscal Analyst
Legislative Finance Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information to the Joint Committee
on Legislative Budget and Audit.
KRISTIN CURTIS
Legislative Auditor
Legislative Audit Division
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an overview on the audit process.
ACTION NARRATIVE
8:02:20 AM
CHAIR MIKE HAWKER called the Legislative Budget and Audit
Committee meeting to order at 8:02 a.m. Representatives
Austerman, Herron, Josephson, Kawasaki, and Hawker and Senators
Meyer, Bishop, Giessel, and Fairclough were present at the call
to order. Senator Olson arrived as the meeting was in progress.
^ELECTION OF CHAIRMAN
ELECTION OF CHAIRMAN
8:03:19 AM
CHAIR HAWKER announced that the first order of business would be
the election of a new chairman.
8:03:34 AM
SENATOR MEYER nominated Senator Anna Fairclough to be Chairman
of the Legislative Budget & Audit Committee for the 28th Alaska
State Legislature. He moved and asked unanimous consent that
nominations be closed. There being no objection, it was so
ordered.
8:04:06 AM
The committee took a brief at-ease.
^ELECTION OF VICE CHAIRMAN
ELECTION OF VICE CHAIRMAN
8:04:39 AM
CHAIR FAIRCLOUGH brought the committee back to order. She
nominated Representative Mike Hawker to be Vice-Chairman of the
Legislative Budget & Audit Committee for the 28th Alaska State
Legislature. She moved and asked unanimous consent that
nominations be closed. There being no objection, it was so
ordered.
^LEGISLATIVE FINANCE
LEGISLATIVE FINANCE
8:05:05 AM
CHAIR FAIRCLOUGH announced that the next order of business would
be an introduction by the Legislative Finance Division.
8:05:16 AM
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, conveyed that the
Legislative Finance Division reported organizationally to the
Legislative Budget and Audit Committee, and that primarily the
work was to review revised program requests.
8:06:19 AM
AMANDA RYDER, Fiscal Analyst, Legislative Finance Division,
Alaska State Legislature, reported that she was the operating
budget coordinator, she worked primarily with the Department of
Health and Social Services and the Department of Labor &
Workforce Development, and that she "spearheaded the
supplemental bill."
8:06:29 AM
ROB CARPENTER, Fiscal Analyst, Legislative Finance Division,
Alaska State Legislature, stated that he was the coordinator for
the capital budget and he worked with the Department of Natural
Resources.
8:06:45 AM
LACEY SANDERS, Fiscal Analyst, Legislative Finance Division,
Alaska State Legislature, declared that she worked with
Department of Commerce, Community & Economic Development, Alaska
Department of Fish & Game, Department of Military & Veterans'
Affairs, and the Department of Revenue. She shared that she
also worked on the fiscal summary.
8:06:59 AM
ILDIKO NYLEN, Administrative Officer, Legislative Finance
Division, Alaska State Legislature, informed that she was the
administrative officer for the division.
8:07:05 AM
KELLY CUNNINGHAM, Fiscal Analyst, Legislative Finance Division,
Alaska State Legislature, specified that she worked with the
criminal justice agencies, which included the Alaska Court
System, Department of Corrections, Department of Law, and
Department of Public Safety, and that she was also responsible
for any fiscal notes.
8:07:11 AM
DANITH WATTS, Fiscal Analyst, Legislative Finance Division,
Alaska State Legislature, conveyed that she worked with the
Department of Administration, Department of Environmental
Conservation, and the University of Alaska.
^OVERVIEW OF THE AUDIT PROCESS
OVERVIEW OF THE AUDIT PROCESS
8:07:29 AM
KRISTIN CURTIS, Legislative Auditor, Legislative Audit Division,
Alaska State Legislature, reported that she was responsible for
the Legislative Audit Division. She presented a high level
overview of the audit process, and explained that her office
were the fiscal staff to the Legislative Budget and Audit
Committee. Directing attention to the Legislative Budget and
Audit Committee Handbook [Included in members' packets], she
explained that it detailed a summary of the committee's duties,
as well as those of the Legislative Audit Division and the
Legislative Finance Division. She cited that the handbook
included the primary governing statutes, organizational charts,
and the formal policies and procedures governing the audit
process that the committee had adopted. These policies included
the number of votes to release an audit or to approve an audit
request, as well as policies on travel and per diem. She
pointed out that there was a full description for the types of
audits in the handbook. She briefly explained the three types
of audits conducted by her office, including the statewide
single audit, which were audits and opinions on the state's
financial statements and its compliance with federal
requirements over federal programs, and the sunset audit, or
performance audit, which were reviews of boards, commissions, or
agencies to determine whether it was operating in the public's
interest, and whether its termination date should be extended.
She reported that, as there were nine such entities with
termination dates for June 30, 2014, her division would perform
these audits during 2013, and provide the reports to the
committee prior to commencement of the legislative session in
January, 2014. She summarized that the third type of audit, the
special audit, was performed in response to a request approved
by the committee. She reported that, currently, there were
three special audits being conducted. She confirmed that the
preliminary report for a special audit would first be presented
to the committee, and then released back to the agency being
audited for its formal comment. These comments would be
incorporated into the final report to the committee.
8:11:16 AM
MS. CURTIS directed attention to page 37 of the aforementioned
handbook, which described the confidential report distribution
process. She shared that the overriding principle guiding these
procedures was for the audit to remain confidential until it was
officially released as a final public document. She listed the
procedures to maintain this confidentially, emphasizing the
importance for the necessary precautions to prevent any
premature release. She shared that final reports would be
delivered to each member's office at least two days prior to the
committee meeting during session and four days prior during
interim, would be marked confidential, and would require a staff
member to sign for its delivery. These reports would be printed
on blue paper, in order to distinguish these confidential audit
reports from any other reports. She noted that preliminary
reports would only be distributed at the committee meeting, and
would be collected at the end of the committee meeting.
8:14:06 AM
MS. CURTIS, in response to Senator Meyer, clarified that a
requested audit, when approved, could take a while for
completion. She offered an example of an audit request which,
although approved a week earlier, would not be started until the
end of the summer.
8:15:08 AM
MS. CURTIS, in response to Senator Bishop, explained that once
an audit had been released to the public, it was no longer
necessary for each legislator's office to return the copies to
the Legislative Audit Division. She described her division as
the committee's fiscal staff. She noted that any contracts
written by the committee would be facilitated by her division,
in conjunction with Legislative Legal Counsel. She introduced
her administrative staff, Sarita Knull and Stacy Nylen.
8:17:08 AM
CHAIR FAIRCLOUGH reiterated that the blue audit file should be
kept safely secured in each legislator's office. She explained
that the committee endeavored to accommodate all reasonable
requests in a timely manner. She pointed out that protocols had
been established to ensure accountability and responsible
contract management. She affirmed that the chair of the
Legislative Budget and Audit Committee, as the communication
conduit between the Alaska State Legislature and the consultants
hired by the committee, would forward any requests for response
to the consultants. She asked the committee to remember that
any modeling and analysis requests would be limited to those
pertaining to bills scheduled for hearing in committees. She
clarified that requests by committee chairs would take
precedence over individual legislators, and pointed out that any
information received would be posted on the committee website.
She reported that the following three current contracts with the
committee would expire at the end of January, 2013: Roger
Marks, Pedro Van Meurs, and DWA Energy Limited.
8:19:05 AM
CHAIR FAIRCLOUGH, in response to Senator Meyer, clarified that
DWA Energy Limited was Dr. Wood, although the contract had not
been utilized for some time.
SENATOR MEYER asked if there had been an Anchorage contact also
working with Dr. Wood.
REPRESENTATIVE HAWKER, in response to Senator Meyer, said that
the local contact had been Dan Dickinson; however, those
contracts had been cancelled at the request of Mr. Dickinson, as
he had contracts with oil and gas clients and had wanted to
avoid any potential appearance of a conflict of interest.
8:20:34 AM
REPRESENTATIVE AUSTERMAN asked for more information on the
contract which had been extended until 2014.
CHAIR FAIRCLOUGH replied that this contract was with PFC Energy,
which analyzed oil and gas fiscal systems; and, as it appeared
that oil and gas contracts would be discussed during the
legislative session, it was prudent to retain the same
contractor as previously used.
8:21:05 AM
SENATOR MEYER asked about an extension to the contract with
Roger Marks.
CHAIR FAIRCLOUGH explained that contract extensions could be
"frowned upon by the legislative offices that advise us on
procurement and it would be better to go back out if the
committee desires, and renegotiate a new contract to bring
before the committee." She pointed out that the Legislative
Budget and Audit Committee had power to authorize contracts up
to $25,000. She offered her belief that the contract with Roger
Marks was "fairly small."
SENATOR MEYER asked to clarify that this contract could be
extended up to $25,000.
CHAIR FAIRCLOUGH explained that this current contract was larger
than $25,000, as it had different responsibilities. She
clarified that she had not yet contacted Mr. Marks regarding a
contract extension, either under the current guidelines, or for
a new contract under $25,000.
8:22:42 AM
SENATOR MEYER expressed his concern, opining that it would be
prudent for more than one contractor to be available for
consultation on any oil and tax legislation. He offered his
belief that Roger Marks had knowledge of the Alaskan
environment, and expressed his interest in retention of a
contract with Mr. Marks, at least through the legislative
session.
8:23:31 AM
CHAIR FAIRCLOUGH relayed that the current contract with Roger
Marks had $147,670 remaining and although she would suggest to
"bring it before the committee and ask the committee to extend
the contract, ... the committee does not have the parameters
that the current contract was negotiated under." She
acknowledged that she did not know whether Mr. Marks would
extend under the current contract or consider under new contract
negotiations. She offered to engage Mr. Mark's, at the
committee's direction, and either extend the current contract,
although she did not know the parameters of this contract,
negotiate a new contract limited to $25,000, or let the current
contract expire.
8:24:31 AM
REPRESENTATIVE HAWKER pointed out that all the contracts, and
the parameters, were posted on the Legislative Budget and Audit
Committee website, in order to maintain an open and transparent
manner.
CHAIR FAIRCLOUGH expressed her appreciation for the
clarification, and observed that the new committee members
should have the opportunity to review the current contracts.
She offered to prepare a committee packet with all the
information to allow all the members the opportunity to review
the contracts.
8:25:16 AM
CHAIR FAIRCLOUGH asked Senator Meyer if he would like her to
discuss with Mr. Marks his willingness to continue under the
existing parameters.
REPRESENTATIVE AUSTERMAN expressed his agreement with Senator
Meyer that it was necessary "to have the best people telling us
exactly what's going on," and he suggested a group meeting to
discuss the existing contracts and give the new committee
members "a sense of exactly where this committee wants to go in
reference to what's coming before us in reference to gas and
oil."
CHAIR FAIRCLOUGH asked if the committee was available to meet in
the near future.
SENATOR MEYER, in response to an earlier question from Chair
Fairclough, stated that he would not be sure whether to extend
the current contract with Mr. Marks until he had reviewed its
parameters. He expressed his agreement with Representative
Austerman for a review of the current contracts prior to a
meeting for discussion. He offered to meet with Senator
Giessel, Chair of the Senate Resources Standing Committee, to
discuss her thoughts for the gathering of information and the
employment of additional consultants.
8:27:16 AM
CHAIR FAIRCLOUGH, declaring that there was a protocol for
specific requests, asked that any request be written and
forwarded to her office. She endorsed a committee meeting prior
to the expiration of the current contracts on January 31, 2013
to allow the committee the opportunity to extend any contracts
it desired.
SENATOR MEYER expressed his approval and offered his belief that
"we need our own consultants to bounce off ideas and challenge
the facts and figures that the administration's going to be
presenting to us."
8:28:17 AM
REPRESENTATIVE JOSEPHSON asked to clarify that the contract with
DWA Energy Limited had been suspended.
CHAIR FAIRCLOUGH, in response, confirmed that it had been
suspended.
8:28:28 AM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
8:29 a.m.
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