Legislature(2017 - 2018)HOUSE FINANCE 519
02/06/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB273 | |
| HB274 | |
| HB275 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 273 | TELECONFERENCED | |
| + | HB 274 | TELECONFERENCED | |
| + | HB 275 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 275
"An Act extending the termination date of the Board of
Massage Therapists; and providing for an effective
date."
REPRESENTATIVE SAM KITO, SPONSOR, reported that the board
was recently created and was operating effectively. He
believed extending the Board of Massage Therapy was
warranted.
Co-Chair Foster invited Ms. Curtis to the table.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, reported that the board was new, and the
audit was the board's first sunset. She read directly from
the audit:
In all areas except licensing, the audit found the
board was operating in the public's interest. In
general, meetings were conducted effectively,
investigations were appropriately processed, and the
board actively issued or changed regulations to
improve the industry and better protect the public.
The audit concluded the board and DCBPL staff should
improve its licensing procedures. Testing found that
applicants were not consistently issued licenses in
accordance with statutes, regulations, and/or
procedures. Additionally, improvements are needed to
comply with the federal standards over criminal
history record information obtained as part of the
licensing process.
Ms. Curtis offered that the Federal Bureau of Investigation
(FBI) audit discovered the deficiency in federal standards
over criminal history records. She highlighted that page 11
contained the scheduled licensing activity in the table "
Exhibit 2" and reported that from July 2016 through August
2017, the board issued 1,186 new licenses. The number was
almost double the 600 licenses that DCBPL management
expected. She moved to the Schedule of Revenues and
Expenditures in "Exhibit 3" on page 14. The board had a
surplus of $265,128 thousand at the end of FY 2017 and
license fees were lowered in FY 2018. She turned to the
audit's three recommendations beginning on page 17.
Recommendation 1, "Division of Corporations, Business, and
Professional Licensing's (DCBPL) director, in consultation
with the Board of Massage Therapists (board), should take
action to improve procedures to ensure licensure
requirements are met." She elaborated that 3 of 31 license
applications tested as part of the audit were licensed
without adequate supporting documentation. She reviewed the
findings on page 17 and read the following excerpts:
A background check report for one initial applicant
was not completed. Th e licensee operated without a
background check report from licensure date of
September 2015 through receipt of the background check
report July 2017 during the license renewal process.
Regulation6 requires applicants submit their
fingerprints for a background check report in order to
obtain a license to practice massage therapy. Per
regulation,7 licenses can be issued to applicants even
though a background check report has not been
received. However, DCBPL staff must ensure the
background check is completed timely. Th e applicant's
fingerprint card was sent back multiple times due to
incomplete information. DCBPL staff did not perform
additional follow-up to obtain a completed fingerprint
card because staff failed to list the applicant on the
DCBPL spreadsheet used for tracking background
reports.
One applicant answered "yes" to a professional fitness
question, however no evidence could be located to
demonstrate that the applicant provided an
explanation. Furthermore, it is unclear whether the
board considered an explanation prior to licensing.
One applicant answered "yes" to a professional fitness
question and provided an explanation which included
evidence of a permanent revocation of a national board
certification for violating the respective code of
ethics and standards of practice. DCBPL staff and the
board did not forward the application to the
investigative section for review. A license was
granted with the requirement that the individual take
a two-credit ethics course. The background check did
not show any convictions, and according to the board
chair, the board believed that a license could not be
denied based on the revocation of a national certifi-
cate. However, DCBPL procedures called for the
application to be forwarded to investigations for
further review.
3:03:30 PM
Ms. Curtis addressed Recommendation 2, "DCBPL's director
should address the Federal Bureau of Investigations (FBI)
audit findings and concerns." She reviewed the findings and
read the following:
DCBPL did not comply with federal standards over
criminal history record information. The FBI audit
conducted in April 2017 found DCBPL did not have
secure channels of communication. Additionally,
applicants were not notified in writing that their
fingerprints were to be used for an FBI background
check and were not advised of the procedures for
obtaining, changing, correcting, or updating an FBI
identification record. Additionally, the federal audit
found inadequate chain of custody for fingerprint
cards. A chain of custody ensures the integrity of the
applicant/fingerprint process. DCBPL addressed one of
the findings by including verbiage in the application
that submitted fingerprints will be sent to the FBI
for a federal background check. However, as of October
2017, the other issues remain outstanding.
Ms. Curtis pointed to Recommendation 3, "The director of
the Office of the Governor, Boards and Commissions should
work to fill the public member position." She read the
following finding:
The public member position on the board became vacant
March 2017 and remained vacant as of October 2017. Per
AS 08.61.010, the board is statutorily required to
consist of five members appointed by the governor, one
of which is a public member who is not a licensed
health care provider, employee of the State, or a
current or former member of another occupation
licensing board. According to Boards and Commissions
staff, stringent requirements make it difficult to
find interested applicants.
3:04:20 PM
Ms. Curtis noted that the response relating to
Recommendation 3 from the Office of the Governor was found
on page 29. The office concurred with the audit and
recommended a legislative solution. She offered that the
agency response was on page 31 and agreed with
Recommendation 1 but felt that additional supervisory
resources were necessary to ensure the license files met
the standards. The department stated that the division had
been unaware of the issue until recently and was responding
quickly to address the finding. The board's response was on
page 33 and concurred with the audit conclusions.
Representative Guttenberg asked what other boards had the
same licensing requirement on fingerprinting and whether
the FBI audited the other boards and what the results were.
Ms. Curtis deferred the question to the department.
3:06:39 PM
Representative Pruitt asked if Ms. Curtis thought the
faults of the department were systemic and enabled
unqualified applicants to become licensed or was unique to
a few applications. Ms. Curtis responded that for the first
recommendation the audit discovered 3 out of 31 licensing
errors. The division felt it was a "significant problem."
The audit discovered an issue with staff that was
corrected. She characterized the issue as the "growing
pains" of a new inexperienced board.
Co-Chair Foster OPENED Public Testimony.
Co-Chair Foster CLOSED Public Testimony.
3:08:55 PM
Co-Chair Seaton asked if the chair of the massage board was
available. He understood there was a concern with
background checks. He asked for the boards position on
background checks.
DAVID EDWARDS-SMITH, CHAIR, BOARD OF MASSAGE THERAPISTS,
answered that the board felt that the initial licensure
should require a background check. However, the board's
official position was to reduce the burden on applicants
and lessen the requirement to every third renewal cycle
rather than every cycle. Co-Chair Seaton asked what the
cost of the background checks were and who paid for the
checks. Mr. Smith answered that the background check was
approximately $80. The burden was placed on the licensee.
Co-Chair Foster asked Ms. Chambers to walk through the
fiscal note.
3:10:09 PM
Ms. Chambers spoke to the previously published fiscal
impact note from DCCED FN1 (CED) and noted that the total
cost of the board was $21.4 thousand. She explained that
$19.9 thousand was allocated for travel costs and that the
board was trying to keep its travel costs down by using
teleconferencing capabilities when possible. She added that
the remaining $1.5 thousand was allocated for $400 for
public notice of board meetings, $1 thousand for training
and conference fees, and $100 for meeting per diem.
Representative Pruitt referred to the commissioner's
response to recommendation 1 and read "with over 13,000 new
licenses issued in FY 17, additional supervisory resources
are needed to ensure that all license files are reviewed to
meet this standard." He asked if additional staff was
necessary. He wondered how the fees would be spread across
all the various boards. Ms. Chambers commented that at
present the board was not requesting additional personnel.
The division was assessing the information provided in the
audit to determine whether some of the challenges were due
to the startup of a new board and the unexpected
significant increase in estimated applications. She thought
that the process would stabilize. She stated that the
boards were "constantly" growing, and the division wanted
to ensure the resources were available to meet the public's
expectations. Representative Pruitt asked if enough notice
would be provided to the boards of the need for additional
staff, so fees could be increased to avoid any impact on
UGF. Ms. Chambers reported that the division was not
authorized to accept UGF and was entirely supported by
licensing fees. The staff maintained positive time keeping.
The license programs were only being charged the amount the
staff worked on their program. She commented that managers
and certain administrative staff dealing with all
licensures charged their time to a general indirect
category that involved a specific methodology. However, the
lion's share of the staff and costs were being accurately
assessed to each board for the amount it cost to manage
them. If the division expected a dramatic increase in staff
time for a board. it would discuss the matter with the
board and put the licensees on notice of a potential fee
increase.
3:16:13 PM
Co-Chair Seaton referred to the first page of the audit
relating to improving licensing procedures. He read the
following: "?comply with the federal standards over
criminal history record information obtained as part of the
licensing process." He asked whether the conclusion was a
department issue or a board matter. Ms. Chambers reported
that the FBI findings "were specifically administrative"
and lied with the division. She explained that the issue
was "new information" that was received immediately before
the audit started. The division resolved two out of the
three issues. The unaddressed issue dealt with the chain of
custody and the division worked with the Department of
Public Safety (DPS) to help find a resolution. The
department confirmed that no legal mechanism in the
division's statutes addressed chain of custody. The
division was looking into "alternative plans" to ensure a
proper chain of custody was in place. Co-Chair Seaton asked
if there was any fallout from not maintaining the required
chain of custody. Ms. Chambers informed committee members
that the division was audited by the FBI every three years
for the five licensing programs that required
fingerprinting. She was unaware of any negative
repercussions to the licensees and acknowledged that it was
the divisions responsibility to resolve the issue.
Representative Guttenberg wondered whether the FBI's audit
findings were the same for the 5 boards that required
fingerprinting and if the division was addressing the
problem for all 5 boards. Ms. Chambers responded in the
affirmative.
Representative Wilson asked whether four years was the
proper amount of time for an extension or if a longer
period worked. Ms. Chambers had not questioned the audit
recommendations and was unable to offer an opinion about
the sunset. She was working with the board to address its
growing pains and felt confident that within four years all
the findings would be addressed. Representative Wilson
asked what the cost of the audit for each board was. Ms.
Chambers deferred to Ms. Curtis for the answer. She noted
that the cost was not born by the division. Representative
Wilson ascertained that the boards also did not pay audit
costs and the costs were assumed by the legislature. Ms.
Chambers responded that she was correct. Representative
Wilson asked for the information.
Co-Chair Foster requested that Ms. Curtis provide the
information.
Ms. Curtis had anticipated the question. She did not
currently have the information. She had asked Ms. Day to
compile the number of hours an audit took to complete. She
informed committee members that the rate was $77. per hour.
She deferred to Ms. Day.
3:20:57 PM
LINDA DAY, AUDIT MANAGER, LEGISLATIVE AUDIT DIVISION (via
teleconference), did not have the number of hours in front
of her and offered to provide the information quickly.
3:21:15 PM
Representative Pruitt asked about the concern over filling
the vacant board seat. He concurred that the criteria were
challenging and noted the requirement that the board member
was not a former member of another occupational licensing
board. He wondered whether removing the requirement would
facilitate finding the public board member more easily. Ms.
Chambers responded that the appointment of board members
was managed through the governor's office. She reported
that she worked closely with the Board and Commissions
director, Shirley Marquardt. She knew that the varying
board requirements made it prohibitive and she wanted more
people to apply for board seats. Her general response was
in favor of removing restrictions for people to serve on
boards. She deferred to Ms. Marquardt to provide the
specific answer. Representative Pruitt clarified that he
was only asking for the specific board. He asked Director
Marquardt to contact the committee if his suggestion would
be helpful without creating additional issues.
Co-Chair Seaton was trying to determine the licensing fees.
Ms. Curtis reminded the committee that the fee schedule was
on page 15 of the audit. She relayed that the renewal few
was $290 plus $60 totaling $350. Co-Chair Seaton asked if
the $60 was for a background check.
Ms. Chambers interjected that there were costs incurred by
the licensees for fingerprinting. She concurred that the
fess were $290 every two years to renew the license and an
additional $60 for DPS to process the fingerprints. Co-
Chair Seaton asked whether it was typical to require
fingerprinting and background checks with every renewal
cycle. Ms. Chambers replied that it was the only board
where subsequent fingerprinting was required. She related
that the board had recently tried to strike a balance
between too frequently and not enough. Co-Chair Seaton
asked if she knew the approximate cost of fingerprinting.
Ms. Chambers answered in the negative.
3:27:15 PM
Representative Guttenberg asked why repeated fingerprinting
was necessary. Ms. Chambers responded that the chief
investigator and DPS was looking into the possibility of
renewing the requirement without additional fingerprinting.
Co-Chair Foster indicated amendments were due on Friday,
February 9, 2018 by 5:00 pm.
HB 275 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the agenda for the following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB273 Support letters 1.19.18.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 273 |
| HB273 Sponsor Statement 01.19.18.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 273 |
| HB273 Legislative Audit 01.19.18.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 273 |
| HB274 Sponsor Statement 1.29.18.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 274 |
| HB274 Supporting Document - 2017 Legislative Audit 1.29.18.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 274 |
| HB275 Sponsor Statement 01.19.18.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 275 |
| HB275 Legislative Audit 10.11.17.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 275 |
| HB275 letter of support.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 275 |
| HB 275 letter of support HFIN.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 275 |
| HB 275 Board of Massage Audit Followup Memo.pdf |
HFIN 2/6/2018 1:30:00 PM |
HB 275 |