08/22/2013 01:30 PM House LEGISLATIVE BUDGET & AUDIT

                                                                                                                                
[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.