Legislature(2021 - 2022)ADAMS 519
05/10/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB203 | |
| SB25 | |
| HB350 | |
| HB5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 203 | TELECONFERENCED | |
| + | SB 25 | TELECONFERENCED | |
| += | HB 350 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 5 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 25(FIN)
"An Act relating to the establishment and maintenance
of an Internet website providing information on state
government financial transactions and specifying the
information to be made available on the website; and
relating to the Alaska Checkbook Online Internet
website."
3:13:39 PM
DAVID DUNSMORE, STAFF, SENATOR BILL WIELECHOWSKI, conveyed
the senator's appreciation for the bill hearing. He relayed
the bill had been first introduced by Senator Wielechowski
in 2008. The administration at the time had developed an
online checkbook system but was taken offline in the
previous year. The Senator felt that it was important to
reintroduce the legislation. He reported that the intent of
the Alaska Online Checkbook Act is to create a free,
searchable website that provided Alaskans with easy access
to detailed and comprehensive financial transactions. The
bill via the committee process made the website more
robust, required more disclosure, and offered ease of
accessibility. He provided a PowerPoint presentation titled
Senate Bill 25 (copy on file). He began on slide 2 titled
SB 25: The Alaska Online Checkbook Act:
• Codifies and modernizes Alaska's Online Checkbook
website.
• Requires the state to provide monthly and annual
financial information to the public on a user-
friendly website.
• Creates a one-stop-shop for information on revenue
and expenses.
• Provides detailed information on state expenditures
and revenue including date, vendor, agency, and
expense type.
Mr. Dunsmore turned to Slide 3 titled Alaskans Deserve
Better Transparency:
• In 2018 Alaska received a failing grade from the U.S
Public Interest Research Group (PIRG) Education Fund
for providing online access to government spending
data.
• Alaska has no statutory requirements to maintain an
online checkbook.
Mr. Dunsmore moved to Slide 4 titled SB 25: A Win-Win-Win
for Alaskans:
• Will provide policy makers with user-friendly access
to actual unaudited revenue and expenditure data
• Makes state government more accountable by making
information readily available to the public.
• Allows vendors to submit more competitive bids by
reviewing previous payments.
Mr. Dunsmore highlighted Slide 5 titled SB 25 Improves
Transparency and Usability:
Current Checkbook Online
Can be taken down at any time.
Not searchable online, data must be downloaded as a
PDF or Excel file.
Does not include revenue reports.
Does not allow year to year spending comparison.
Does not include spending for the University of
Alaska or public corporations.
Alaska Online Checkbook Act
Monthly & annual reporting requirements codified in
Alaska Statutes.
Data is searchable online by agency, vendor, year,
purpose, amount, and accounting code.
Includes both revenue & expenditures.
Allows year to year spending comparisons.
Includes revenue & expenses of University of Alaska &
Public corporations.
3:17:33 PM
Mr. Dunsmore reviewed Slide 6 titled SB 25: Reporting
Requirements:
Revenues
Receipts or deposits.
Proceeds from taxes.
Agency earnings (sales, services, licenses, permits,
etc.).
Other revenues (Interest, Lease, Gifts, Donations,
etc.).
Mr. Dunsmore discussed revenue reporting requirements on
slide 6 and expounded that the bill contained provisions
protecting confidential information for both revenues and
expenditures. He presented Slide 7 titled SB 25: Reporting
Requirements:"
Expenditures
The names and locations of any persons to whom
payment was made.
The amounts of the expenditures disbursed.
The type of transaction, by account code, including
the purpose of the expenditure.
Mr. Dunsmore addressed expenditure reporting requirements
on slide 7 and elucidated that along with the privacy
protections an amendment was adopted that protected
employer wage payments that would not be include in the
online checkbook. The public employee wage payment
information would be aggregated. He moved to slides 8
titled SB 25: Reporting Requirements:"
Employees and Contractors
The number of full-time, part-time, and temporary
employees by agency.
The number of independent contractors by agency.
Total general fund payroll by agency.
Mr. Dunsmore summarized Slide 9 titled SB 25: Reporting
Requirements:"
Account Balances and Debt
Statutory Budget Reserve (SBR).
Constitutional Budget Reserve (CBR).
Permanent Fund Earnings Reserve Account (ERA).
Total long-term debt by agency
Mr. Dunsmore directed attention to Slide 10 titled The
Current Checkbook Website is Outdated:
Download Information By Fiscal Year Only.
Must Download ALL Information.
Difficult to search.
Mr. Dunsmore noted that slide 10 and 11 depicted pages from
the current online checkbook and characterized it as
challenging for users. He continued to Slide 11 titled
Current Website Requires Downloading Spreadsheet:
In FY 2016 There Were 78,156 Individual Reports In
The "Online Checkbook".
You Must Use Search Functions Within Excel To Find
Vendors.
Cannot Easily Track Spending By Year.
Mr. Dunsmore underlined the deficiencies of the current
online checkbook. He reviewed Slide 12 through Slide 17
titled Example: Ohio that depicted pages from Ohios
OHIOCHECKBOOK.com online checkbook that highlighted its
ease of use and accessible information. He elaborated that
Ohios checkbook offered searches by Year, agency, expense
type, total agency spending and included a download data
option. In addition, the data could be portrayed as a
check.
He concluded the presentation on Slide 18 titled
Additional Benefits:
Mississippi reported that every information request
fulfilled by its transparency website rather than by a
state employee saves the state between $750 and
$1,000 in staff time.
South Carolina open records requests dropped by two-
thirds after the creation of its transparency website,
reducing staff time and saving an estimated tens of
thousands of dollars.
The Texas Comptroller used its transparency website
to evaluate spending. By monitoring contracts more
closely and sourcing services from new vendors when
the potential for cost-cutting was identified, the
state saved more than $163 million.
3:21:21 PM
Representative Rasmussen appreciated the intention of the
bill and more transparency under the legislation. She
reported that the obsolete checkbook had listed very
inaccurate expenses that led to its removal. She wondered
what provisions were in place that guaranteed accurate
data. Mr. Dunsmore answered that based on conversations
with the Department of Administration (DOA) the upgrades to
the Integrated Resource Information System (IRIS) would
alleviate the accuracy concerns. The sponsor included a
delay in launching the website until October 2024, to allow
the department time for troubleshooting any website issues.
Representative Rasmussen asked if there was any way to
completely remove the human error component related to data
accuracy. She wondered how the data would be verified for
accuracy. She questioned how the updated IRIS system
correlated to more accurate data. Mr. Dunsmore would follow
up with detail in writing. Representative Rasmussen
highlighted one instance that had been brought to her
attention by a constituent. She elucidated that an
incorrect listing showed that Representative Rasmussen
expended $1 million in travel costs. She was concerned
about inaccurate or erroneous information pertaining to a
private business or contractor where their reputation was
on the line due to a major error by the state. She wanted
to ensure accuracy was fully vetted before the bill was
passed.
Co-Chair Merrick indicated that Representative Johnson had
joined the meeting.
3:24:46 PM
Representative LeBon asked if the committee would hear from
the department or state treasury on the bill pertaining to
how it viewed the online checkbook functioning and to
report on any challenges it anticipated implementing the
bill.
ROBERT ERVINE, ACTING DIVISION DIRECTOR, FINANCE DIVISION,
DEPARTMENT OF ADMINISTRATION (via teleconference), asked
Representative LeBon to repeat the question. Representative
LeBon complied. Mr. Ervine replied that the department had
worked with the sponsor to have the bill crafted in a way
that was possible to implement within the timeline of the
bill. He elaborated that DOA addressed how it would include
data from state corporations not using the state's central
accounting system. The department would provide Excel
spreadsheet templates and the corporation would include
revenue and expenditure data so their information could be
uploaded into the website. He responded to a comment by
Representative Rasmussen. He indicated that the
departments goal was to ensure the data was displayed in a
way that was clear and accurate for the public. The
department removed the online checkbook in 2020 due to
errors and reposted it in 2021. The department believed the
current posted information was accurate. He cautioned that
the possibility of an error existed and if one was brought
to the department's attention it would correct it.
3:28:12 PM
Representative Johnson wondered how the state would keep up
with all the data entry the bill would require. She deduced
the checkbook would be a massive undertaking especially
in ensuring accuracy.
Mr. Dunsmore replied that he believed all the data was
already entered into the statewide accounting system and
added that the data was currently searchable within the
central accounting system.
Co-Chair Merrick asked Mr. Ervine if he agreed.
Mr. Ervine answered that the goal would be to ensure all
the information was entered in a logical way that made
sense to the public. He relayed that the accounting
technicians who were entering information into the system
would undergo training regarding what information would be
included.
3:30:39 PM
Representative Johnson would look into the issue offline.
Representative Wool cited the handout titled Following the
Money 2018 - How the 50 States Rate in Providing Online
Access to Government Spending Data by the U.S. PIRG
Education Fund and Frontier Group (copy on file). He read
the following from page 1 of the Executive Summary.
State-operated transparency websites provide
checkbook-level detail on government spending,
allowing citizens and watchdog groups to view payments
made to individual companies, details on purchased
goods or services, and benefits obtained in exchange
for public subsidies.
Representative Wool understood the issue of transparency.
He questioned the limits of transparency. He worried about
peoples right to privacy. He wondered if it was
transparent for a student at UAF to know the salary of
their professor as an example of how much information was
necessary and what the value of the information was. He was
not sure of the extent of the information that would be
available and asked Mr. Dunsmore to address the issues in
his response. Mr. Dunsmore answered that transparency
issues were addressed during the committee process in the
Senate. He clarified that employee wage payments were not
included in the data. He added that the bill only made what
was currently public data available and only provided the
states publicly accessible financial information.
Representative Wool understood that the bill established a
website at a cost of $65 thousand per year. He wanted to
ensure that the website would not contain easily accessible
wage information. He considered wage information too much
transparency. He understood the need for contract
information to avoid preferential bidding, etc. He asked
that other than providing the public an overview of state
expenditures was there any other area of concern the bill
was addressing. Mr. Dunsmore replied that the sponsor took
an umbrella approach and included information about all
agencies while respecting confidential information or
aggregated information to protect confidentiality.
Representative LeBon pointed to slide 6 showing different
types of revenues and associated reporting requirements. He
inquired whether all types of revenue would be added up at
months end and reported on. Mr. Dunsmore responded in the
affirmative. He delineated that the monthly reporting
requirement was added during the committee process and the
data could be unaudited.
Representative LeBon asked if the revenue was accounted for
on a cash basis receipt or whether there was an accrual
basis applied to the revenue. Mr. Ervine deferred the
answer to a written response. Representative LeBon noticed
that under other revenues there was an interest category.
He asked whether the state was waiting for the interest or
lease payment before it was accounted for or if the payment
was anticipated. He deduced it was the difference between
cash basis and accrual basis.
3:38:19 PM
Representative Carpenter asked a technical question
regarding data entry. He inquired whether the accounting
software used by the state was a relational datatbase
that could be programmed to provide the necessary
information and link to data bases to obtain the
information from agencies not on the central accounting
system and then make the data available to the public.
Mr. Ervine replied that not every state agency used the
central accounting system known as IRIS. Therefore, those
outside of the central system would need to provide the
information to the system. He reiterated how the
information would be collected and added to the system.
Representative Carpenter asked how many agencies did not
use the centralized accounting system. Mr. Ervine estimated
that it was 5 to 6 agencies and offered to verify and
follow up. Representative Carpenter wondered what the
reason was that not all agencies were using the IRIS
system. Mr. Ervine answered that they were separate
components for the state including things like the Alaska
Railroad and Alaska Permanent Fund Corporation (APFC).
Representative Carpenter asked what agencies outside of the
IRIS system could communicate with an online application to
provide its financial information for the checkbook.
Co-Chair Merrick asked Mr. Ervine to follow up with the
information.
3:41:40 PM
Representative Wool asked about the granularity of the
data regarding public employees pay and of people who pay
taxes to the state. He assumed the information was
confidential. He wondered about confidentiality either for
expenditures or revenues when warranted. He mentioned tax
revenue for oil companies and guessed that it was
proprietary. Mr. Dunsmore answered that Representative Wool
was generally correct. He understood that taxpayer
information was confidential. However, there were numerous
exceptions in statute. He was unaware of any exceptions for
actual dollar amounts of taxes paid. He offered to review
the statutes.
Representative Carpenter asked how the bill addressed the
inevitable questions that would arise from the public
regarding access to the information. He asked if there
would be a central clearinghouse for questions on how to
find the information or how to interpret the information.
Mr. Dunsmore deferred to the department. He expected the
department would include itself as a contact. He
ascertained that individuals would need to contact the
specific agency with detailed questions. Representative
Carpenter liked the idea of increased accountability and
saw value in the bill. He restated his concern regarding
the increased workload caused by public inquiries. He
wondered if the bill addressed the issue. Mr. Dunsmore
answered that he did not believe there was anything in the
bill that would address the issue. He relayed that he
learned from doing research for the bill that other states
experienced a decreased administrative burden, since the
information was easily accessible. Representative Carpenter
cited Section 4 of the bill that required the Department of
Administration (DOA) to develop, operate, and maintain a
searchable internet website. He wanted to hear from the
department what the website would look like.
3:47:31 PM
Co-Chair Merrick asked Mr. Ervine to comment.
Mr. Ervine answered that DOA currently uploaded and
maintained the online checkbook. He responded to the
question by Representative Carpenter. He relayed that the
department had thought through implementation of the bill
and included a $250 thousand capital appropriation to hire
a contractor to develop the website. The department did not
have the programmers to develop a website to meet the
requirements in the bill.
3:48:43 PM
Co-Chair Merrick OPENED public testimony.
ROBIN O'DONOGHUE, ALASKA PUBLIC INTEREST RESEARCH GROUP
(AKPIRG), ANCHORAGE (via teleconference), spoke in favor of
the bill. He read form a prepared statement
AKPIRB was established in 1974 and advocated on behalf
of public and consumer interests. To our knowledge, we
are the only non-governmental, non-profit organization
focused on addressing Alaska-specific consumer
interest issues. AKPIRG supports SB 25 The Alaska
Online Checkbook Act. The implementation of the
Department of Administration's Alaska Online Checkbook
is critical because it enables the public to better
understand what their government officials are up to
and how they spend our public dollars. He furthered
that AKPIRB appreciated that committee process that
improved the bill and provided more transparency. The
group believed the bill was timely in order for the
public to track the significant amount of federal
dollars scheduled to pour into the state from the
Infrastructure Investment and Jobs Act (IIJA) as well
as other federal money expended.
3:50:24 PM
PENNY VADLA, SELF, SOLDOTNA (via teleconference), she
favored the legislation. She believed more disclosure was
needed. She thought the transparency for communities the
checkbook offered was extremely important. She looked
forward to a proprietary and confidential but informative
system.
Representative Carpenter thanked Ms. Vadla for calling in.
Co-Chair Merrick CLOSED public testimony.
3:52:51 PM
SB 25 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 5 Article.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 CS WorkDraft v.U 051022.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Letters of Support 4.26.21.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Public Testimony Rec'd by 051022.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Public Testimony Rec'd by 051022_Redacted.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Sectional Analysis - U.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Sponsor Statement - U.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Supporting Document - Letters Received as of 4.9.2021.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| HB 5 Explanation of Changes v. F - U 051122.pdf |
HFIN 5/10/2022 1:30:00 PM |
HB 5 |
| SB 25 Response to House Finance Questions.pdf |
HFIN 5/10/2022 1:30:00 PM |
SB 25 |