00 HOUSE BILL NO. 166 01 "An Act relating to performance reviews and audits of executive branch agencies, the 02 University of Alaska, and the Alaska Court System; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 24.20.271 is amended to read: 06 Sec. 24.20.271. Powers and duties. The legislative audit division shall 07 (1) conduct a performance post-audit of boards and commissions 08 designated in AS 44.66.010 [AND OF THOSE PROGRAMS AND ACTIVITIES OF 09 AGENCIES] subject to termination as determined in the manner set out in 10 AS 44.66.020 [AND 44.66.030], and make the audit, together with a written report, 11 available to the legislature not later than the first day of the regular session of the 12 legislature convening in each year set out with reference to boards and [,] 13 commissions [, OR AGENCY PROGRAMS] whose activities are subject to 14 termination as prescribed in AS 44.66; the division shall notify the legislature that the 01 audit and report are available; 02 (2) audit at least once every three years the books and accounts of all 03 custodians of public funds and all disbursing officers of the state; 04 (3) at the direction of the Legislative Budget and Audit Committee, 05 conduct performance post-audits on any agency of state government; 06 (4) cooperate with state agencies by offering advice and assistance as 07 requested in establishing or improving the accounting systems used by state agencies; 08 (5) require the assistance and cooperation of all state officials and 09 other state employees in the inspection, examination, and audit of state agency books 10 and accounts; 11 (6) have access at all times to the books, accounts, reports, or other 12 records, whether confidential or not, of every state agency; 13 (7) ascertain, as necessary for audit verification, the amount of agency 14 funds on deposit in any bank as shown on the books of the bank; no bank may be held 15 liable for making information required under this paragraph available to the legislative 16 audit division; 17 (8) complete studies and prepare reports, memoranda, or other 18 materials as directed by the Legislative Budget and Audit Committee; 19 (9) have direct access to any information related to the management of 20 the University of Alaska and have the same right of access as exists with respect to 21 every other state agency; 22 (10) conduct an audit every two years of information found in the 23 annual reports required under AS 42.05.211 and AS 42.06.220 regarding compliance 24 by the Regulatory Commission of Alaska with the requirements of AS 42.05.175(a) - 25 (e) and of the timeline extensions made by the commission under AS 42.05.175(f), 26 and of other performance measures adopted by the commission. 27  * Sec. 2. AS 44.66.020 is repealed and reenacted to read:  28 Sec. 44.66.020. Agency programs. (a) Every year, the Legislative Budget and 29 Audit Committee shall ensure that the review team conducts a performance review of 30 the appropriate programs of the agencies listed in this subsection. The first review 31 shall occur in the calendar year set out after each agency's name, as follows, and 01 subsequent reviews of each agency, or part of an agency, shall occur every 10 years: 02 (1) Department of Corrections, 2012; 03 (2) Department of Military and Veterans' Affairs, 2013; 04 (3) Department of Revenue, 2013; 05 (4) Alaska Court System, 2013; 06 (5) the divisions in the Department of Health and Social Services 07 responsible for health care services, 2014; 08 (6) Department of Health and Social Services, all programs other than 09 those administered by the divisions in the department responsible for health care 10 services, 2015; 11 (7) Department of Education and Early Development, 2016; 12 (8) University of Alaska, 2016; 13 (9) Department of Administration, 2017; 14 (10) Department of Commerce, Community, and Economic 15 Development, 2017; 16 (11) Department of Fish and Game, 2018; 17 (12) Department of Environmental Conservation, 2018; 18 (13) Department of Natural Resources, 2018; 19 (14) Department of Transportation and Public Facilities, 2019; 20 (15) Department of Law, 2020; 21 (16) Department of Public Safety, 2020; 22 (17) Department of Labor and Workforce Development, 2021. 23 (b) Subject to appropriation, the Legislative Budget and Audit Committee 24 shall hire or contract with individuals to form a review team or teams to complete the 25 reviews under this section. 26 (c) In the year designated as the year for review in (a) of this section, the 27 agency shall, 28 (1) before February 1, provide to the review team citations to the 29 agency's authority under the Constitution of the State of Alaska or the Alaska Statutes 30 to administer its programs; 31 (2) before April 1, provide to the review team a list of programs or 01 elements of programs, comprising at least 10 percent of the general funds in the 02 agency's budget appropriated from the general fund that 03 (A) do not serve a current need; 04 (B) are not authorized by the Constitution of the State of 05 Alaska or the Alaska Statutes; or 06 (C) are not essential; 07 (3) before April 1, provide to the review team a list of active 08 encumbrances and an explanation of the continuing need for any encumbrance 09 unsatisfied more than four years after it was incurred. 10  * Sec. 3. AS 44.66 is amended by adding a new section to read: 11 Sec. 44.66.040. Duties of the review team. (a) During a review year set out in 12 AS 44.66.020(a), the review team shall 13 (1) collaborate with the legislative audit division and the legislative 14 finance division to identify any earlier audit findings or budgetary issues for the 15 agency; 16 (2) schedule public hearings in Juneau, Anchorage, and Fairbanks to 17 review agency activities and identify problems or concerns; and 18 (3) consult with other states and appropriate public policy 19 organizations to establish best practices for the agency. 20 (b) The review team shall analyze all materials relevant to the performance of 21 the agency, including 22 (1) a 10-year growth history and a 10-year projection of agency 23 expenses by funding source, prepared by the office of management and budget; 24 (2) organizational charts, personnel charts by location that show the 25 number of positions and the functions of each position, and a list of transfers of 26 personal services funding to or from other line items within the agency during the 27 preceding 10 years, prepared by the office of management and budget; 28 (3) audit information, including a list of agency audit 29 recommendations, prepared by the legislative audit division; 30 (4) a list of any financial issues relating to the agency's operating or 31 capital expenditures, prepared by the legislative finance division; 01 (5) an explanation of the function and procedure for dedicated funds or 02 any other special funds in the agency, prepared by the legislative finance division; 03 (6) a 10-year history of any budget ratifications or supplemental 04 budget requests, prepared by the legislative finance division; and 05 (7) analysis and summary of confidential information that the review 06 team may request, through the Legislative Budget and Audit Committee, from the 07 legislative audit division, if necessary to complete the team's review. 08 (c) Before December 16 of the review year set out in AS 44.66.020(a), the 09 review team shall provide a confidential preliminary report to the Legislative Budget 10 and Audit Committee. 11 (d) Before January 6 of the year following the review year set out in 12 AS 44.66.020(a), the review team shall provide to the chairs or cochairs of the senate 13 and house finance committees a final report that 14 (1) evaluates the efficiency and effectiveness of the agency's programs; 15 (2) evaluates the appropriateness of the budget reductions proposed 16 under AS 44.66.020(c); 17 (3) determines if the agency acted in good faith to correct problems 18 identified in any previous audit or review; 19 (4) evaluates the success of the agency in achieving its mission, goals, 20 and objectives; 21 (5) lists agency programs or actions not authorized by statute and 22 identifies other authority for those actions; 23 (6) identifies agency authority to collect fees, conduct inspections, 24 enforce state law, or impose penalties; 25 (7) recommends improvements to agency practices and procedures, 26 including means to decrease regulatory burdens or restrictions without decreasing 27 public service and safety; 28 (8) identifies areas in which programs and jurisdiction of agencies 29 overlap and assesses the quality of interagency cooperation in those areas; 30 (9) evaluates whether the agency promptly and effectively addresses 31 complaints; 01 (10) evaluates to what extent the agency encourages and uses public 02 participation in rulemaking and other decision making; 03 (11) analyzes how the review team's recommendation to terminate the 04 agency or to terminate any program within the agency would affect federal funding or 05 instigate federal intervention; 06 (12) evaluates the agency's process for implementing technology and 07 recommends new types or uses of technology to improve agency efficiency and 08 effectiveness; 09 (13) identifies programs and functions duplicated by another 10 government agency or private entity and recommends a single entity to perform those 11 programs and functions; 12 (14) recommends a reduction in appropriations for the agency based on 13 the review under this section and the agency's participation in the review process, 14 including the agency's responses to requests for information and the agency's timely 15 implementation of previous recommendations; 16 (15) identifies reductions recommended as a result of a review 17 conducted under this section; 18 (16) identifies the extent to which statutory, regulatory, budgetary, or 19 other changes are necessary to enable the agency to better serve the interests of the 20 public and to correct problems identified during the review; 21 (17) identifies areas that need in-depth review in order to provide 22 complete information to the Legislative Budget and Audit Committee for 23 consideration in the audit process; and 24 (18) identifies any other elements appropriate to a performance 25 management review. 26 (e) The Legislative Budget and Audit Committee shall track annually and 27 publish in its annual report under AS 24.20.311 actual reductions in state expenditures 28 as a result of a review conducted under this section. 29 (f) The senate and house finance committee chairs, cochairs, and 30 subcommittees may incorporate the recommendations of a report submitted under (d) 31 of this section into the budget for the fiscal year following the report. 01  * Sec. 4. AS 44.66.050 is amended to read: 02 Sec. 44.66.050. Legislative oversight. (a) Before the termination, dissolution, 03 continuation, or reestablishment of a board or commission under AS 08.03.010 or 04 AS 44.66.010 [, OR OF AN AGENCY PROGRAM UNDER AS 44.66.020 AND 05 44.66.030,] a committee of reference of each house, which shall be the standing 06 committee of legislative jurisdiction as provided in the Uniform Rules of the 07 Legislature, shall hold one or more hearings to receive testimony from the public, the 08 commissioner of the department having administrative responsibility for each named 09 board or [,] commission [, OR AGENCY PROGRAM,] and the members of the board 10 or commission involved. The hearings may be joint hearings. The committee shall also 11 consider the proposed budget of the board or [,] commission, [OR AGENCY 12 PROGRAM,] prepared in accordance with AS 37.07.050(f) [,] and the performance 13 audit of the activities of the board or [,] commission, [OR AGENCY PROGRAM,] 14 prepared by the legislative audit division as prescribed in AS 24.20.271(1). The 15 committee may consider any other report of the activities of the board or [,] 16 commission [OR PROGRAM], including [BUT NOT LIMITED TO] annual reports, 17 summaries prepared by the Legislative Affairs Agency, and any evaluation or general 18 report of the manner of conduct of activities of the board or [,] commission [, OR 19 AGENCY PROGRAM] prepared by the office of the ombudsman. 20 (b) During a public hearing, the board or [,] commission [OR AGENCY] shall 21 have the burden of demonstrating a public need for its continued existence or the 22 continuation of the program, and the extent to which any change in the manner of 23 exercise of its functions or activities may increase efficiency of administration or 24 operation consistent with the public interest. 25 (c) A determination as to whether a board or commission [OR AGENCY 26 PROGRAM] has demonstrated a public need for its continued existence must take into 27 consideration the following factors: 28 (1) the extent to which the board or [,] commission [, OR PROGRAM] 29 has operated in the public interest; 30 (2) the extent to which the operation of the board or [,] commission [, 31 OR AGENCY PROGRAM] has been impeded or enhanced by existing statutes, 01 procedures, and practices that it has adopted, and any other matter, including 02 budgetary, resource, and personnel matters; 03 (3) the extent to which the board or [,] commission [, OR AGENCY] 04 has recommended statutory changes that are generally of benefit to the public interest; 05 (4) the extent to which the board or [,] commission [, OR AGENCY] 06 has encouraged interested persons to report to it concerning the effect of its regulations 07 and decisions on the effectiveness of service, economy of service, and availability of 08 service that it has provided; 09 (5) the extent to which the board or [,] commission [, OR AGENCY] 10 has encouraged public participation in the making of its regulations and decisions; 11 (6) the efficiency with which public inquiries or complaints regarding 12 the activities of the board or [,] commission [, OR AGENCY] filed with it, with the 13 department to which a board or commission is administratively assigned, or with the 14 office of victims' rights or the office of the ombudsman have been processed and 15 resolved; 16 (7) the extent to which a board or commission that regulates entry into 17 an occupation or profession has presented qualified applicants to serve the public; 18 (8) the extent to which state personnel practices, including affirmative 19 action requirements, have been complied with by the board or [,] commission in [, OR 20 AGENCY TO] its own activities and in the area of activity or interest; 21 (9) the extent to which statutory, regulatory, budgetary 22 [BUDGETING], or other changes are necessary to enable the [AGENCY,] board or [,] 23 or commission to better serve the interests of the public and to comply with the factors 24 enumerated in this subsection; 25 (10) the extent to which the board or [,] commission [, OR AGENCY] 26 has effectively attained its objectives and purposes and the efficiency with which the 27 board or [,] commission [, OR AGENCY] has operated; and 28 (11) the extent to which the board or [,] commission [, OR AGENCY] 29 duplicates the activities of another governmental agency or the private sector. 30 (d) As to each board or [,] commission [, OR AGENCY PROGRAM] 31 assigned to it for purposes of review, the committee of reference shall, not later than 01 the 60th day of the legislative session, submit a report to the presiding officer of the 02 house. The report must contain a summary of the findings of the committee as to the 03 compliance of the board or [,] commission [, OR PROGRAM] with the factors 04 enumerated in (c) of this section, together with a summary or recommendations of the 05 committee as to each of the following: 06 (1) an identification of the problems or the needs that the programs and 07 activities of the board or [,] commission [, OR AGENCY] are intended to address; 08 (2) a statement, to the extent practicable, of the objectives of the 09 program of the board or [,] commission [, OR AGENCY PROGRAM,] and its 10 anticipated accomplishments; 11 (3) an identification of any other programs having similar, conflicting, 12 or duplicate objectives; 13 (4) an assessment of alternative methods of achieving the purposes of 14 the program; 15 (5) an assessment of the consequences of eliminating the board or [,] 16 commission [, OR PROGRAM] and consolidating its activities with another program, 17 or of funding it at a lower level; 18 (6) a justification for the recommended continuation or extension of 19 the board or [,] commission [, OR PROGRAM,] and an explanation of the manner in 20 which it avoids duplication of or conflict with other efforts; and 21 (7) any other information that, in the opinion of the committee, would 22 improve the performance of the board or [,] commission [, OR AGENCY] with 23 respect to its representation of and responsiveness to the public interest. 24 (e) The committee of reference may introduce a bill providing for the 25 reorganization or continuation of the board or [,] commission. Not [, OR AGENCY 26 PROGRAM. NO] more than one board or [,] commission [, OR AGENCY 27 PROGRAM] may be continued or reestablished in any legislative bill, and the board 28 or [,] commission [, OR AGENCY PROGRAM] must be mentioned in the title of the 29 bill. 30  * Sec. 5. AS 44.66.060 is amended to read: 31 Sec. 44.66.060. Existing claims. This chapter does not cause the termination 01 or dismissal of a claim or right of a citizen against a board, commission, or program of 02 an agency terminated by legislative action or under this chapter that is subject to 03 litigation. Claims and rights shall be assumed by the department to which the board or 04 commission terminated under this chapter was attached for administrative purposes. 05  * Sec. 6. AS 44.66 is amended by adding a new section to read: 06 Sec. 44.66.070. Definitions. In this chapter, 07 (1) "agency" means a state department or agency, whether in the 08 legislative, judicial, or executive branch, and includes the University of Alaska; 09 (2) "review team" means appropriate professionals hired by or under 10 contract with the Legislative Budget and Audit Committee to complete a performance 11 review under AS 44.66.020 - 44.66.040. 12  * Sec. 7. AS 44.66.030 is repealed. 13  * Sec. 8. This Act takes effect July 1, 2011.